Difference Between Hire Purchase And Installment System

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 on agreement to purchase as is usual in the case of sale.

The hirer may return the goods without further payment as to future installments.

The goods are not returnable unless there is some default on the part of the buyer,the buyer is liable for the price agreed to or reasonable price if not agreed

Seller may take possession of the goods if the hirer is in default.

Seller can only sue for price if the buyer is in default.

The buyer can not hire-out,sell,pledge,assign,destroy,damage or transfer goods.

The buyer may dispose of and give title to any bona fide purchaser.