In our previous post, we covered the main important topic of Hire Purchase. Now, we will highlight the Difference between Hire Purchase and Installment Sale.
Installment Sales | Hire Purchase |
1. The ownership of the asset is transferred at the time of making down payment. 2. In installment sales, if the buyer makes default in making future payments, the seller cannot recover the asset sold. 3. The seller can only file a case against the buyer and he will get only the outstanding amount. | 1. Ownership is transferred after the payment of last installment. 2. In hire purchase, if the buyer makes default in making future payments, the seller can recover the asset sold because he is still the woner of the asset. 3. There is no need to file a case as the asset is already the property of the seller. If the buyer defaults in the payment, the seller coups the asset and all the payments done by the buyer till now are charged as hire. |