Buying on Credit Hire Purchase Agreements Hire Purchase
Buying on Credit Hire Purchase Agreements
Hire Purchase Often shortened to HP. A common way to pay for larger items. You pay: an initial deposit (sometimes) monthly/weekly instalments interest
Pros. . . . You can spread the cost of the item which you might not have otherwise been able to afford. Some places offer interest free credit. Easier to get HP credit than borrowing from the bank or credit card company.
Cons. . . . The item doesn’t actually belong to you until you make the final payment. It’s a form of personal debt. Personal circumstances may change which could result in not being able to make the required payments. Possible repossession.
Example 55 inch TV from Currys Costs £ 1548. 54 (cash) Or 156 weekly payments of £ 14. 29
Weekly Payment Option If you decided to buy this TV and pay for it weekly it would cost you over all: £ 2229. 24 That’s a massive £ 680. 70 more than the original price!
Example 2 Nokia C 3 from Phones 4 U Costs £ 98. 16 (cash) Or £ 10 deposit PLUS 52 weekly payments of £ 2 How much would it cost you in the end if you chose the payment plan option?
Weekly Payment Option £ 114 How much more is that? £ 15. 84 What do you think about this option?
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