For those unfamiliar between Hire Purchase and Installment System, tabulated below in summary some of the differences:

Hire Purchase

Installment System

Is an agreement of hiring

Is an agreement of outright purchase

Property in goods or the ownership remains with hire vendor until the last installment is paid by the purchaser.

The title to goods passes to the buyer immediately […]

This article deals the Accounting treatment of Hire Purchase Agreement of Purchaser:
In the Purchaser’s Books

Goods on hire purchase are treated as Assets upon receipt. The cash price is recorded as Cost of Assets re: Fixed Assets and

The interests on hire purchase are charge to the Profit & Loss account as revenue expenditure over the period […]

This article deals with the features of Hire Purchase and the differentiation between Hire Purchase, Credit Sale and Rental Agreement:-
Features of Hire Purchase
When goods are purchased under a Hire Purchase Agreement:

Vendor of the goods leases the asset to the purchaser on the terms that the purchaser shall pay to the vendor hire charges equivalent to […]