PROF . V.B.

SHAH INSTITUTE OF MANAGEMENT

Submitted to : Nilesh sir

Presented by :
209 219 229 239 249 259 269 Mistry Nikita K. Patel Jinal N. Pathak Denish H. Ramoliya Amit V. Shikhaliya Sonal A. Vadaliya Dhaval H. Bavadiya Nikul B.

A system by which a buyer pays for a thing in regular installments while enjoying the use of it, It is called hire purchase

INTRODUCTION OF HIRE PURCHASE

A method of buying goods through making installment payments overtime period.
Goods are delivered by the owner to a person called the hirer with a condition that the hirer will pay the agreed price of the goods by different specified installments on specified dates over a period of time.

IMPORTANT TERMS IN HIRE PURCHASE

Hirer: A person who obtains possession of goods from an owner under a hire purchase agreement.

Owner: A person who lets, delivers possession of goods, to a hirer under a hire purchase agreement.

Meaning Of Hire Purchase

Hire purchase means a transaction where goods are purchased and sold on the terms that:-

Payment will be made in installment. The possession of the goods is given to the buyer immediately. The ownership remains with the vendor till the last installment is paid. The seller can repossess the goods in case default in payment of any installment. Each installments in the hire purchase is treated as higher charges till the laser installment is paid.

FEATURES . . .
Under hire purchase system, the buyer takes possession of goods immediately & agrees to pay the total hire purchase price in installments. Each installments is treated as hire charges. The ownership of goods passes from buyer to seller on the payments of the installments. in case the buyer makes any default in payments of Any installments the seller has right to reposses the goods.

FEATURES . . .
Goods are let out on finance by a finance company to the hire purchaser customer. Buyer is required to pay an equal amount of periodic installments during a given period. Ownership transfers at the payment of the last installment Funding period-periods are normally between 3-7years.

The Hirers right

To buy the goods at any time by giving notice to the owner and paying the balance of the HP price less a rebate. To return the goods to the owner. With the permission of the owner, to assign both the benefit and the burden of the contract to a third person. Where the owner wrongfully repossesses the goods, either to recover the goods plus damages for loss of quiet possession or to damages representing the value of the goods lost.

The Owners right

The owner usually has the right to terminate the agreement where the hirer defaults in paying the installments. To forfeit(detain) the deposit.
To retain the installments already paid and recover the balance due To repossess the goods. To claim damages for any loss suffered.

Hire-purchase agreement
The important clauses in a hire-purchase agreement are: Nature of Agreement-Term, nature and beginning of the agreement. Delivery of Equipment-The place and time of delivery and delivery charges. Location-The place where the equipment shall be kept during the period of time.

Continued . . .
Inspection-the hirer has examined the equipment and is satisfied with it.

Repairs-The hirer to obtain at his cost, Insurance on the equipment and to handover the insurance policies to the owner.
Risk-Loss and damage to be bear by the hirer.

Registration and Fees

Hire purchase

Hire purchase VS Leasing

The hirer has the option to purchase the goods. Is a method of financing business assets & consumer articles. Depreciation & investment allowance can be claimed in hire purchase. In leasing the lessee has no option to buy the goods. Is a method of financing business assets only. Depreciation & investment allowance cannot be claimed in leasing. No deposit is required in leasing.

20% deposit is required in hire purchase.

HIRE PURCHASE COMPANIES IN INDIA

I.T.C. Limited Leasing Finance India Ltd.

Nicco Uco Financial Services Ltd.

HDFC

Many kinds of business asset are suitable for financing using hire purchase including:Plant and machinery, Business cars, Commercial vehicles, Agricultural equipment, Hotel equipment, Medical and dental equipment, Computers, including software packages, Office equipment.

References :
http://www.scribd.com/doc/66059614/Hire-Purchase http://www.scribd.com/doc/32194753/Hire-Purchase