Hire Purchase - GCSE Business Definition

Hire purchase is a method of buying goods through an arrangement where the purchaser pays an initial deposit followed by a series of regular installments. In a hire purchase agreement, the buyer can use the goods immediately, but ownership remains with the seller until all payments, including any interest, are completed. This method is commonly used for purchasing expensive items like cars or appliances. It's important for GCSE Business students to understand that hire purchase can be a more costly option over time due to interest charges. Buyers should ensure they can afford the installments before entering into such an agreement.