In most agreements, a deposit is required at the outset to reserve the asset, and payments are then calculated based on how long the contract will last. Interest rates, which are included in the hire purchase arrangements, may be fixed or variable.
A hire purchase is a lease agreement that allows you to use an asset for any purpose, and its price is paid in equal monthly installments. The lessee becomes the asset’s owner after paying the last instalment. In this particular type of agreement, the lessee is responsible for the maintenance and insurance of the asset.