The main points of distinctions between finance and hire purchase are as
follows:
1) In a lease finance property in the goods owner transfers the right to
use the property to another party for a period of time in return of periodic
payments. Whereas in hire purchase the property in the goods passes to the
hirer upon payment of the last installment.
2) In a lease finance a contract under which one party, The Lessor (owner)
of an asset agrees to grant the use of that asset to another, The Lessee
(user), in exchange for periodic rental payment. But in hire purchase the position of the hirer
is that of a bailee till he pays the last installment.
3) In a lease finance,
It is a contractual agreement between the two parties whereby one acquires the
right to use the property and the other who allows the former the right to use his owned property. But in case of hire purchase,
the hirer may, if he so likes, terminate the contract by returning the
goods to its owner without any liability to pay the remaining installments.