Installment purchase is perhaps the most popular marketing technique of companies because majority of people are unable to pay full amount of purchase done by them and in order to lure them almost all companies offer this facility to its customers.
- Under this system of purchase the buyer acquires possessions of the goods immediately at the time of agreement and not after paying the last installment which is the case with hire purchase system
- The Buyer is required to make payment in installment over a period of time which ranges from 1 year for products like television or air conditioners to 20 years in case of purchase of apartments.
- In case of default in respect of last Installment, the seller has no right to take back the goods. The seller can only sue the buyer for unpaid balance.
- Buyer can also transfer the goods even if he or she has not paid the last installment because the ownership has already passed at the time of agreement.
- Since ownership has passed the buyer cannot return the goods to the seller if he or she does not like the product.