how hire purchase agreements work
a hire purchase agreement is a type of credit agreement between a buyer and seller people typically enter into these contracts to buy products after an initial payment the buyer continues to make installment payments until the total purchase price is paid off at this point the buyer becomes the owner of the product these agreements are similar to rent to own transactions because they give the lessee the option to buy at any time during the agreement such as rent to own cars like rent to own hire purchases can benefit consumers with poor credit by spreading the cost of expensive items that they would otherwise not be able to afford over an extended time 12because ownership is not transferred until the end of the agreement hire purchase plans offer more protection to the vendor than other sales or leasing methods for unsecured items that s because the items can be repossessed more easily should the buyer be unable to keep up with the repayments 1