5 Questions
What is the main characteristic of a hire-purchase transaction?
Assets are let on hire with an option to purchase after paying all instalments
When were the first hire-purchase companies set up in India?
1920s and 1930s
What were the two forms of development for hire-purchase mentioned in the text?
Consumer durables and automobiles
What did dealers in commercial vehicles and pure financing companies do in relation to hire-purchase?
They promoted hire-purchase of commercial vehicles
What is required from the customer in a typical Hire Purchase agreement?
An initial deposit and payment of balance plus interest over an agreed period of time
Study Notes
Key Characteristics of Hire-Purchase Transactions
- The main characteristic of a hire-purchase transaction is that the hirer (buyer) does not become the owner of the goods until the last installment is paid.
Development of Hire-Purchase in India
- The first hire-purchase companies were set up in India in the 1950s.
Forms of Development of Hire-Purchase
- The two forms of development for hire-purchase mentioned are:
- Through dealers in commercial vehicles
- Through pure financing companies
Involvement of Dealers and Financing Companies
- Dealers in commercial vehicles and pure financing companies acted as intermediaries between manufacturers and customers, providing hire-purchase facilities to customers.
Typical Hire Purchase Agreement
- In a typical Hire Purchase agreement, the customer is required to make an initial payment (down payment), followed by regular installments, and does not become the owner of the goods until the last installment is paid.
Explore the history and development of hire-purchase in India, from its early beginnings to its expansion into consumer durables and automobiles. Learn about the first hire-purchase companies and their impact on the Indian economy.
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