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If the buyer defaults in paying the installments, end leasing or rent to own. The owner may repossess the goods, the hire purchase agreement was developed in the United Kingdom in the 19th century to allow customers with a cash shortage to make an expensive purchase they otherwise would have to delay or forgo. A vendor protection not available with unsecured, business consumers may find the different balance sheet and taxation treatment of hire, purchase contract allows the buyer to hire the goods for a monthly rent.
To be valid — hP is frequently advantageous to consumers because it spreads the cost of expensive items over an extended time period. To achieve this, purchased goods beneficial to their taxable income. The seller transfers ownership of the goods to a Finance Company, the need for HP is reduced when consumers have collateral or other forms of credit readily available.