Explain the term ‘Hire Purchase’ - Junior Cycle Business Studies - Question 10 - 2018

Hire Purchase is a financial arrangement that allows an individual to use an item or asset for a specified period while paying for it in multiple installments.

In this system, the buyer usually starts by paying a deposit, which is a percentage of the total cost of the item. Following the deposit, the buyer continues to make regular payments over an agreed period. The ownership of the item is transferred to the buyer once all payments, including the final installment, have been made.

This method is commonly used for expensive items such as vehicles or household appliances, making it easier for individuals to budget and manage their finances.