Which of the following is an advantage of hire purchase agre…

JAMB Commerce 2023 206 views
Source: JAMB · 2023

Which of the following is an advantage of hire purchase agreements?

  1. Immediate ownership of the asset
  2. Lower initial payment compared to outright purchase ✓
  3. No interest charges
  4. Full payment is required upfront
Explanation

In hire purchase, the buyer pays a small deposit and spreads the rest over months. So the initial payment is lower than an outright purchase. This lets a person use a car or generator before paying in full.

Ownership only passes after the last instalment, and interest is charged.

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