Hire purchase is quickly becoming a popular financing option for persons in the market for new items. In Kenya, it is possible to acquire different assets through hire purchase, commonly referred to as lipa mdogo mdogo. Whether it is a new smartphone, smart, digital, or android TVs, refrigerators, furniture sets, or kitchen appliances, that one needs, it is possible to acquire them through hire purchase. Leading credit companies such as Kenya Credit Traders have hire purchase offers for a wide variety of products.
Reasons To Consider Hire Purchase
There are plenty of reasons why more people are settling for hire purchase. One such benefit is the ability to split the cost of an asset over a longer duration. This helps you maintain your cash flow. Payment is done in installments after making the initial payment thus helping you split the cost over the period. Another reason why hire purchase is becoming common is the fact that one acquires a given asset even before making total payments. After making the initial payment, one acquires the asset. However, the title of the asset is only transferred after one has paid the last installment, thus exercising their obligation to purchase the asset.
What Does A Title In Hire Purchase Agreement Mean?
When out to sign any hire purchase agreement, there is a need for one to understand the terms and conditions of the agreements. It is crucial to also understand the terms used in the agreement before signing the contract. Title is of the terms that feature in any hire purchase agreement.
The term title is used in a hire purchase agreement to mean ownership of the assets. When you acquire goods on hire purchase, you do not have the title transferred immediately. You will only become the owner of the assets once you have exercised the right of purchase, after making the last payment.
Since the title of the goods is not transferred to the hirer (buyer) immediately, it means that they cannot resell the assets. In case one doesn’t honor the agreement, the owner (seller) has the right to repossess the goods.