Hire-Purchase

Hire purchase is a form of interest-bearing secured consumer finance used to acquire assets such as cars. It involves the customer paying an initial deposit and monthly payments until the purchase price plus interest has been repaid. The consumer does not own the asset until the final payment has been made. Hire purchase period is generally from one to five years. Failure to make payments on time can result in the hire purchase provider repossessing the asset. The collateral for the financing is the asset being purchased.