When one opts to purchase assets on hire purchase terms, they are required to sign a hire purchase contract. This a legally binding agreement between the hire purchase dealer and the buyer. Just like any other agreement, it is essential that one understands the terms and conditions in the hire purchase contract.
Benefits of hire purchase agreements
Hire purchase, also known as lipa later, lipa mdogo mdogo, or lipa pole pole, is a purchase agreement that allows a buyer to hire products before completing payments to become the owner. When purchasing high-value assets such as electronics, furniture, kitchen appliances, a car, or a home, one might not have all the cash to pay upfront. With a hire purchase, you only pay a fraction of the total cost to acquire the asset. After acquiring the asset, one has the chance to utilize the asset. However, the agreement ends when you pay the total cost, and this involves paying installments. One only becomes the owner of the items after the last payment.
Navigating hire purchase contracts
At some point, we are all guilty of clicking “agree to terms and conditions” without even reading them. Most people do not have the time to read the fine print in some agreements. However, when it comes to hire purchase contracts, there is a need to invest effort and time. This will save you time, money, and hassle. Here are reasons to read between the lines before signing a hire purchase contract.
· Save time and money
At times, reading the fine print when signing a hire purchase contract can feel time-consuming. However, doing it will actually save, time and hassle. You can potentially save large sums of money if you understand the hire purchase agreement. Remember that hire purchase involves assets worth at least tens of thousands. By not reading terms and conditions, one is compromising the assets when they end up not honoring the agreement.
· Become an informed consumer
Reading terms and conditions when acquiring items on hire purchase terms ensures that you know about the products. One should not take chances and assume that they know everything about a hire purchase agreement. Being aware of the provisions of the hire purchase agreement makes you a smart and informed customer.
· Know your rights
The essence of a hire purchase agreement is to protect both parties. As a buyer, if you take your time navigating hire purchase contracts, you understand your rights. When one feels the contract doesn’t protect them, they do not have an obligation to sign it.
Learn more about hire purchase agreements on our website. Follow Kenya Credit Traders.
