What are the advantage and disadvantages of hire purchase?
What are the advantage and disadvantages of hire purchase?
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Advantages Disadvantages
Simple to apply Higher total cost
Fixed interest rates Car can be repossessed if you don't make payments
Spread the cost over a number of years Contract terms can be quite long
What are advantages of hire purchase?
- Kind to your cashflow.
- Access high-spec Assets.
- Lower interest than other funding options.
- It is possible to claim capital allowances against tax.
- Own the asset after the last installment.
- Committing to ongoing fixed payments.
- Higher cost overall.
- Asset depreciation.