hire purchase

hire purchase
= HP
A method of buying goods in which the purchaser takes possession of them as soon as an initial instalment of the price (a deposit) has been paid; ownership is obtained when all the agreed number of subsequent instalments have been completed. A hire-purchase agreement differs from a credit-sale agreement and sale by instalments (or a deferred payment agreement) because in these transactions ownership passes when the contract is signed. It also differs from a contract of hire, because in this case ownership never passes. Hire-purchase agreements in the UK were formerly controlled by government regulations stipulating the minimum deposit and the length of the repayment period. These controls were removed in 1982. Hire-purchase agreements were also formerly controlled by the Hire Purchase Act (1965), but most are now regulated by the Consumer Credit Act (1974). In this Act a hire-purchase agreement is regarded as one in which goods are bailed in return for periodical payments by the bailee; ownership passes to the bailee if the terms of the agreement are complied with and the option to purchase is exercised.
A hire-purchase agreement often involves a finance company as a third party. The seller of the goods sells them outright to the finance company, which enters into a hire-purchase agreement with the hirer.

Accounting dictionary. 2014.

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  • Hire purchase — (abbreviated HP) is the legal term for a contract, in this persons usually agree to pay for goods in parts or a percentage at a time. It was developed in the United Kingdom and can now be found in China, Japan, Malaysia, India, South Africa,… …   Wikipedia

  • Hire purchase — Hire purchase, or, more fully, Hire purchase agreement Hire purchase agreement, or Hire and purchase agreement Hire and purchase agreement (Law) A contract (more fully called contract of hire with an option of purchase) in which a person hires… …   The Collaborative International Dictionary of English

  • hire-purchase — a form of purchase under which the purchase price can be paid over an agreed period of time by instalments. During the period the goods purchased remain the property of the seller (or the hire purchase company to whom the seller has assigned his… …   Law dictionary

  • hire purchase —    Hire purchase, commonly abbreviated to HP (called ‘instalment credit’ in the USA, where the system emerged in the nineteenth century) plays an important but decreasing role in providing consumer credit, especially for poorer people, for the… …   Encyclopedia of contemporary British culture

  • hire purchase — n. Brit. INSTALLMENT PLAN * * * …   Universalium

  • hire purchase — n [U] BrE HP a way of buying expensive goods by regularly paying small amounts over a period of time American Equivalent: installment plan …   Dictionary of contemporary English

  • hire purchase — noun uncount BRITISH the INSTALLMENT PLAN …   Usage of the words and phrases in modern English

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  • hire purchase — n. Brit. INSTALLMENT PLAN …   English World dictionary

  • hire purchase — system for financing the purchase of plant and equipment, where the ownership is vested with the lender until the final payment is made. The borrower is required to place a deposit and make periodic (usually monthly) repayments at a flat rate of… …   Financial and business terms

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