Difference between Hire Purchase System and Instalment Payment System

Hire Purchase System: Under hire purchase system there is an agreement between vendor and purchaser in which goods are purchased in instalment after paying some immediate amount to vendor. After paying the last instalment the purchaser get the title of goods.

Instalment Payment System: Under instalment payment system the high value of goods are purchased easily by purchaser. After entering into the agreement the purchaser gets the title of the goods and in case if purchaser is unable to pay any instalment amount then the vendor has a right to sue the purchaser in the court of law to get the default amount.

There is a difference between hire purchase system and instalment payment system:

S.No.	Point of difference	Hire Purchase System	Instalment Payment System
1.	What is hire purchase system and instalment payment system?	Under hire purchase system the goods are purchased in instalment and in last instalment the purchaser get the title of goods.	Under instalment payment system the purchaser get the goods immediately for his or her personal use.
2.	In which system purchaser get title of goods in hire purchase system or instalment payment system?	After paying the last instalment of goods purchaser get the title of goods.	In instalment payment system the purchaser immediately gets the title of goods after entering in agreement.
3.	In which system the goods are purchased will be forfeit in future?	The goods can be taken back by vendor if any instalment amount is not paid by purchaser	The vendor has only right to get back its instalment amount by sue in the court of law.
4.	In hire purchase system or instalment payment system, which system provides right to repair the goods?	In hire purchase system goods are repaired by vendor until the purchaser pay the full amount of goods to vendor.	In instalment payment system goods are repaired by purchaser because the purchaser has title of goods.
5.	Goods are treated as stock in hire purchase system or instalment payment system?	In hire purchase system the instalments which are not due to purchaser are treated as stock by vendor.	In instalment payment system the instalments which are not due to purchaser are not treated as stock by vendor.
6.	Third party title of goods in hire purchase system or instalment payment system	In hire purchase system the purchaser has no right to transfer the title of goods to third party (third person) because the purchaser gets the title after paying the last instalment and before that he/she is not able to sell the goods to third person.	In instalment payment system the purchaser has right to transfer the goods to third party because the purchaser has good title of goods.
7.	Risk in hire purchase system and instalment payment system	In hire purchase system the goods are sold in instalment and until the last instalment is not paid by the purchaser to vendor. The vendor has a risk of default of any instalment payment.	In instalment payment system the vendor has no risk because the title of goods is transfer to purchaser.