Hire-Purchase and Rental Goods

A hire-purchase (H-P) activity is a transaction that involves regular fees for the access to an entity, coupled with an option to buy provided that all conditions agreed in the contract are fulfilled at the end of the predetermined period. As such, H-P can be considered a type of installment credit. It allows the consumer to gain immediate possession of a property without obtaining the legal ownership of the physical entity over an agreed period of time. Through offering direct access to the property, H-P fosters customers' “buy now, pay later” attitude and encourages a culture of borrowing, thereby strongly contributing to an expansion of the consumer credit market.

H-P is a purchase of rights, not of a property. According to property rights theory, the ownership ...