What are the differences between hire puchase and deffared payment?

Answer 1

Hire purchase (HP) involves acquiring an asset through an agreement where the buyer pays an initial deposit followed by regular installments, with ownership transferring only after the final payment. In contrast, deferred payment allows a buyer to acquire an asset immediately while delaying payment to a later date, often without installment payments. While HP typically includes interest and fees, deferred payment may or may not involve additional costs. Essentially, HP is an installment plan leading to ownership, while deferred payment is a credit arrangement for a future lump sum payment.