Differences and similarities between hire purchase and deferred payment - SS2 Commerce Past Questions and Answers - page 1
What is the main difference between hire purchase and deferred payment?
Ownership of the asset
Payment structure
Possession of the goods
In hire purchase, when does the buyer gain full ownership of the asset?
Immediately upon possession
After completing all payments
After a specified period of time
What is the main similarity between hire purchase and deferred payment?
Possession of the goods
Payment structure
Ownership of the asset
In deferred payment, when does the buyer make the payment?
Before taking possession of the goods
After a specified period of time
In equal installments over the deferred period
What is the primary focus of hire purchase?
Delaying the payment for a purchase
Immediate ownership of the goods
Gradual ownership through installment payments
Define hire purchase in simple terms.
Hire purchase is a financial arrangement where a buyer acquires an asset by making regular installment payments, gaining possession and use of the asset but not ownership until the final payment is made.
What is the main difference between hire purchase and deferred payment?
The main difference is that in hire purchase, the buyer does not immediately own the asset and gains ownership only after completing all payments, whereas in deferred payment, the buyer immediately owns the goods or services but defers the payment to a later date.