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Hire Purchase - Exercise 5 (Part 1)

on May 20, 2020

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EXERCISE 5 (Read and understand the question)

Hire Purchases Senior 3 Topics

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Terms You must know before starting this chapter Hire Purchases Vs Credit Purchases Definition Of Hire Purchase Section 2(1) Hire Purchase Act 1967 : The agreement which includes hiring of goods and at the same time giving an option to buy. It is a business transaction where by a seller allows a buyer to buy asset(s) by installments, based on interest rate charged. Characteristics of Hire Purchase The transaction is based on the rules of Hire Purchase Act 1967 and Hire Purchase Act (amendment) 1976. Right of the goods is still belonging to seller. The rights will be transferred at the end of the installment period. The owner will have a right to confiscate the assets if installment is not been paid by the buyer Interest rate will be charged on any balance from the payment in certain agreed period. The purposes of the interest rate are for additional administrative/management expenditure and to protect the goods from risk of dam

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