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Hire purcase is somthing to similar to instalment purcase through intermideary oa lender the ownershpi passes on it the byer no only after paying all the dues and installment but also when the lender agrees to sell.

In Practical

Hire Purchase, where only 2 parties are involved, the buyer and seller. Seller sells the goods with proper Invoice with Sales Tax, buyer ask him to charge some interest and give him facility to pay in installments. Property is of seller till contract is over.

Hire Purchase finance, where 3 parties are involved, the buyer, the seller and the financier. Seller sells the goods with proper Invoice with Sales Tax, buyer pays whatever possible by him, and ask its financier to pay the balance. The seller is out of picture now. Property is of financier now till the contract is over. The financier recieves its money in installments, and nothing to do with Sales Tax.

Hypothecation:

Hypothecation is a position where the owner assigns the right of ownership to the lender through still holding the possession.

In practical Hypothecation, where 3 parties are involved, the buyer, the seller and the financier. Seller sells the goods with proper Invoice with Sales Tax, buyer pays whatever possible by him, and ask its financier to pay the balance to be treated as "loan" against the property which he is about to acquire. The seller is out of picture now. Property is of buyer now. It is given as security against the loan which buyer has taken from financier.recieves its money in installments, and nothing to do with Sales Tax.

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Q: What is the difference between hire hypothecation and hire purchase?
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