Are you considering a hire purchase agreement for your next purchase? Are you looking for high ticket items that are likely to be out of reach in a cash purchase?

Hire purchase is one of the leading purchase agreements and financing methods in modern times. The increase in the number of assets available on hire purchase terms is one of the reasons behind the growth of hire purchase. Technology also plays a vital role in enhancing access to hire purchase as a financing option for customers.

How Does Hire Purchase Work

The primary goal of a hire purchase agreement is to make assets affordable. Assets that are considered expensive in cash are made affordable in a hire purchase contract. In hire purchase, the total cost is divided into two: the down payment and the installments. The down payment is usually as low as 15% of the total cost of the asset. The installments further break down the cost into small affordable amounts. The payments can be daily, weekly, or monthly depending on the buyers’ income frequency.

How hire purchase changed customers’ lives

Hire purchase aims at improving inclusivity by ensuring customers have access to affordable financing. Customers get the chance to acquire assets quickly without having to pay upfront. This is beneficial to consumers as well as business owners.

One of the KCT hire purchase success stories is a customer looking to improve their restaurant. To achieve the goal, the customer needed several items such as a Smart TV and kitchen appliances. Acquiring the items at once would create a significant gap in their working capital. However, by choosing to hire purchase, they only pay a small fraction as a downpayment, and the remaining cost is distributed over several months. This ensures that every month the restaurant owner has enough capital to run their business.

Another KCT hire purchase success story is that hire purchase allows customers to access quality items. Quality assets are without a doubt expensive. Take the example of a homeowner who wants to replace a refrigerator in their home. A new fridge costs tens of thousands. When one cannot afford the amount in a cash purchase, they will be stuck with the old one. However, other businesses or homeowners settle for low-quality assets that are cheaper. These appliances are not energy efficient and only increase your energy bills every month. By choosing a hire purchase, the homeowner can acquire a quality fridge and benefit from it as they make the payments in installments.

Follow Kenya Credit Traders for more success stories on hire purchase agreements.