Are you considering purchasing items on hire purchase? Is it the right decision? Any consumer looking to acquire assets will want to make the right decisions. Before signing any agreement, it is vital to check how it will benefit you. If you are considering a hire purchase deal, ensure you get a consumer’s perspective on hire purchase deals before making your final decision.

How Consumer Hire Purchase Works

A hire purchase agreement allows a buyer to acquire items they need but can’t purchase outright. The hire purchase dealer requires a down payment to allow the customer to acquire the items. This makes hire purchase ideal for items such as TVs, computers, pieces of furniture, kitchen appliances, and other valuable items. After paying the deposit, the buyer can acquire the assets and even has a right to utilize them.

When one acquires items on hire purchase terms, during the duration of the contract, they will be hiring them. Consequently, one doesn’t become the owner of the items even though they have acquired them and are using them. However, at the end of the hire purchase agreement, the dealer transfers the title to the buyer, thus making them the owner of the assets.

Benefits Of A Hire Purchase Agreement For Consumers

Looking from a consumer’s perspective, hire purchase has numerous benefits.

·         Purchase quality products

Hire purchase agreements allow customers to acquire assets without paying upfront. This means one can purchase even expensive but quality items instead of paying upfront and settling for cheaper assets.

·         Spread the cost

By choosing hire purchase, one has a chance to pay for items in installments. This makes it easier to pay for assets and even leaves you some funds to use on other expenses.

·         Own the assets at the end of the agreement

Hire purchase, unlike leasing, allows you to own the assets at the end of the agreement. Once you pay all the installments, the seller transfers ownership to you.

·         Enjoy low interest rates

Choosing hire purchase over other financing methods ensures you enjoy low-interest rates. These are fixed rates, meaning the cost doesn’t change during the duration you are repaying.

Drawbacks of hire purchase

Hire purchase also has limitations for consumers looking to buy new assets. The major drawback of hire purchase is a higher total cost than in the case of a cash purchase. This is a result of the interest charged on the installments.

Find the latest hire purchase deals here.