TERM USED IN HIRE PURCHASE AGREEMENTS

TERMS USED IN HIRE PURCHASE AGREEMENTS
1. Hire Vendor : Hire vendor is a person who delivers the goods along with its possession to the hire purchaser under a hire purchase agreement.

2. Hire Purchaser : Hire purchaser is a person who obtains the goods and rights to use the same from hire vendor under a hire purchase agreement.

3. Cash Price : Cash price is the amount to be paid by the buyer on outright purchase in cash.

4. Down Payment : Down payment is the initial payment made to the hire vendor by the hire purchaser at the time of entering into a hire purchase agreement.

5. Hire Purchase Instalment : Hire purchase instalment is the amount which the hire purchaser has to pay after a regular interval upto certain period as specified in the agreement to obtain the ownership of the asset purchased (on payment of the last installment) under a hire purchase agreement. It comprises of principal amount and the interest on the unpaid amount.

6. Hire purchase price : It means the total sum payable by the hire purchaser to obtain the ownership of the asset purchased under hire purchase agreement. It comprises of cash price and interest on outstanding balances.