ZIMSEC O Level Commerce Notes: Hire Purchase
Details shown on Hire Purchase goods
- A description of the goods.
- The cash price of the goods.
- The total Hire Purchase Price i.e. the cash price + the relevant finance charges
- The required deposit amount.
- The amount and number of installments required.
- The finance charges.
Advantages to seller.
- Increases sales and thus profits.
- It encourages impulse buying.
- They get commission from Finance Houses.
- Insurers good during the Hire Purchase period.
- The seller has the right to repossess the goods if the buyer defaults on payment.
- Capital is tied up in the form of debts.
- Repossessed goods may not be fit for resale.
- Increases the risk of bad debts.
- Increased clerical work is required to administer Hire Purchase sales.
- Bad publicity can ensue from suing defaulters.
To access more topics go to the Commerce Notes page.