Definition: Hire purchase

European System of Accounts (ESA)

Arrangement whereby a durable good is sold to a purchaser in return for agreed future payments. The buyer takes possession of the good immediately, though legally it remains the property of the lessor as collateral/ guarantee until all agreed payments have been made by the lessee (ESA 2010).

Selling of a durable good to a purchaser in return for agreed future payments. The buyer takes possession of the good immediately, though in law it remains the property of the seller or financier as collateral/guarantee until all agreed payments have been made. Hire purchase is usually restricted to consumer durables, and most purchasers are households. Financiers of hire purchase contracts typically are separate institutional units operating in close co-operation with sellers of durable goods (ESA 1995).
Source:
Eurostat, "European System of National and Regional Accounts - ESA 2010", Luxembourg, 2013
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