Back and Next - Back and NextHire purchase system gaining ground
Thursday, December 4, 2008
Though the hire purchase system has been in place in many parts of the world for decades, it is a relatively new concept in The Gambia.
Hire purchase is a way of paying for items such as, cars, furniture and computers. Different businesses and financiers have minor differences in how they define hire purchasing. Terms such as conditional sale and lease financing are sometimes used interchangeably. What one enterprise calls hire purchase is referred to by another as lease financing, and so on.
However, the purpose of this article is not to delve into these definitions. We will do that in a subsequent edition.
Hire purchasing can be done through a financial company or directly with the company. One good example is the Ecobank-J Mart Hire Purchase Agreement which requires one to open an Ecobank account to access the facility.
Despite the minor variations in definition, there are certain basics that remain the same.
* You don’t pay the full sum at once but in instalments. The amount of each instalment and the period is based on what was agreed upon.
* You don't legally own the goods until you've paid back all the money you owe. This means that you cannot modify or sell them
*Your contract is with a finance company (not the retailer) who will own the goods until the final payment is made.
* You will be liable for any damage caused to the goods during the contract period.
Look around before you sign
Like any credit deal, you need to think carefully before committing yourself to any hire purchase agreement.
Explore other credit options first. You may be able to borrow the money more cheaply through a loan, or get a better deal from another hire purchase provider.
A good way to compare the cost of credit is to look at the APR (annual percentage rate) and the total amount you will pay. Remember there may be fees or charges as well as your monthly repayments.
If you opt for hire purchase, take the time to understand what you are agreeing to and if you can afford the deal. If your circumstances change for the worse, you may lose both the goods and the money you've paid.
Hire purchase is a way of paying for items such as, cars, furniture and computers. Different businesses and financiers have minor differences in how they define hire purchasing. Terms such as conditional sale and lease financing are sometimes used interchangeably. What one enterprise calls hire purchase is referred to by another as lease financing, and so on.
However, the purpose of this article is not to delve into these definitions. We will do that in a subsequent edition.
Hire purchasing can be done through a financial company or directly with the company. One good example is the Ecobank-J Mart Hire Purchase Agreement which requires one to open an Ecobank account to access the facility.
Despite the minor variations in definition, there are certain basics that remain the same.
* You don’t pay the full sum at once but in instalments. The amount of each instalment and the period is based on what was agreed upon.
* You don't legally own the goods until you've paid back all the money you owe. This means that you cannot modify or sell them
*Your contract is with a finance company (not the retailer) who will own the goods until the final payment is made.
* You will be liable for any damage caused to the goods during the contract period.
Look around before you sign
Like any credit deal, you need to think carefully before committing yourself to any hire purchase agreement.
Explore other credit options first. You may be able to borrow the money more cheaply through a loan, or get a better deal from another hire purchase provider.
A good way to compare the cost of credit is to look at the APR (annual percentage rate) and the total amount you will pay. Remember there may be fees or charges as well as your monthly repayments.
If you opt for hire purchase, take the time to understand what you are agreeing to and if you can afford the deal. If your circumstances change for the worse, you may lose both the goods and the money you've paid.
Author: by Kojo
See Also - See Also