UK Accounting Glossary
This refers to when equipment used by the business is paid off through a finance company. At the end of the lease period the company can pay a final fee to own it or start payments for a new piece of equipment.
Hire Purchase is a system by which one pays for a product in regular instalments while having use of it.
We’re buying the new company car on hire purchase.
Hire purchase is now available for new commodities such as electric cars.
The average consumer owes more than £6,300 through personal loans, credit cards and hire purchases.
There are four key methods of funding: cash purchase, bank overdraft, hire purchase and leasing.
The court determine the purchaser was unaware of any preceding hire purchase agreement.
Before the days of credit cards, hire purchase was king.
Industrial Hire Purchase is fundamentally the same as hire-purchase for personal customers but instead solely applies to capital equipment.
There were the hire purchase repayments to be made on the kitchen equipment and the company car, not to mention a mortgage on the actual premises.
The authorities could limit the availability of credit for hire purchases by either specifying larger minimum deposits or shorter maximum repayment periods.
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This glossary post was last updated: 26th December 2018.