You Can Buy On Hire Purchase Hire purchase is more like a contract for the acquisition of an asset, which contains a provision giving the hirer an option to acquire legal title to the asset upon the fulfillment of certain conditions stated in the contract. This is most times in accordance with statement of accounting standard (SAS21). Under this contract, the buyer pays the owner of the property a number of installment until the full price of the asset is paid, when the owner of the property will either pass automatically to the hirer the asset or he will exercise an option to purchase the property by the payment of a stated sum. Note that the legal ownership of the asset still remains the seller until the hirer fully balances the price, according to the contract between them. Payment under this contract is usually made installmentaly while the buyer takes the possession of the asset on the payment of final installment; this is the beauty of the business. The owner may repossess the property if the buyer fails to pay any of the installment when due. However, the hire vendor can not take possession of the asset or chalet if the hirer had made 3/5 of the payment under the contract, this clause applies in case of motor vehicle. 1/2 of the payment under the contract, in case of other goods. Where relevant payment has been made before the buyer defaults, the option left for the buyer is to sue the seller or the hire vendor. The accounting reality of hire purchase is that the hirer takes possession of the asset, uses it as his property pay for it, maintain it and as contracted to buy it giving this principle, as generally agreed, that the buyer should record the property on hire purchase contract as a fixed asset purchased with deferred payment. On the other hand the vendor should treat the transaction as an outright sale with differed revenue to be recognized over the period of the agreement. You really don’t have to be very confused buying your goods on deferred payment which is also buying in hirer purchase. Follow the right steps as agreed by your vendor and reach an agreement as to the payment of money and you can acquire that asset you think you need very urgently. Be very prudent about it.