There are various advantages in installment sale transactions for both the buyer and the seller. In developing countries where people cannot afford assets by making a lump sum payment, this mode of asset acquisition is awesome. Some of them are:
Some of the benefits – advantages are as follows:
- Seller can enjoy high gross profit margin because he or she is providing the asset at a very nominal down payment,
- Buyer can acquire the possession of the asset by making just nominal down payment which usually ranges from 10 {1bb28fb76c3d282be6cfd0391ccf1d9529baae691cd895e2d45215811b51644c} to 30 {1bb28fb76c3d282be6cfd0391ccf1d9529baae691cd895e2d45215811b51644c}.
- Seller keeps the original documents of the asset, that is why the risk of theft and fraud are reduced.
- In developing countries where the inflation rate is increasing and people are losing their purchasing power, installment sale is an important tool to acquire the asset.