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 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.