Question

When does the asset legally belong to the purchaser under a hire purchase agreement?

• A. Final instalment is paid and purchaser agrees to a legal option to buy the asset
• B. Purchaser agrees to legal option to buy the asset
• C. Final instalment is paid
• D. On date of first instalment in repayment

Answer 1

Answer: (A)

Final instalment is paid and purchaser agrees to a legal option to buy the asset

When, final installment is paid and purchased agrees to a legal option to but the asset, then the asset legally belong to the purchaser under a high purchase agreement.