Suppose Mr. Gosh turns to a salesperson who deals with air conditioning because he wanted to buy an air conditioner (Ac) for his store worth $US 50,000. At first, Mr. Gosh does not have $50,000 in hand, so he made an agreement with the seller that he would first pay $5,000 for air conditioning and that the remaining $45,000 would be paid by him in 5 identical monthly installments of $9,000, as well as interest of 10% per year, calculated each month on the remaining balance. The general terms and conditions of sale also provide that ownership of the asset is transferred after payment of the last instalment, and if the customer does not pay the measurements, the asset is withdrawn. This whole arrangement is the purchase of rent. Companies that need expensive machinery — like construction, manufacturing, facility rental, printing, road freight, transportation, and engineering — can use leases, as well as startups that have few collateral to set up lines of credit. In the case of the time-bound purchase, the purchaser of the asset is first required to account for and not the full amount of the sale price of the asset as a balance after payment of the instalment in specified interest instalments. The conditions relating to the repayment period and the percentage of interest shall be set jointly by both parties at the time of conclusion of a lease agreement. The purchaser of an asset has the right to use the asset immediately after payment of the initial amount of the down payment, but ownership is transferred only when a tranche remains unpaid.
We can say that the lease agreement is like leases for which it is possible with the lessee to buy the asset at any time during the term of the lease agreement, and as when buying the lease, the property is transferred only at the time of payment of the last instalment, there is more protection for the seller, because the asset can be withdrawn in the event of non-payment of the instalment amount. The rental purchase system is governed by the Hire Purchase Act 1972. When a vehicle is purchased when purchasing the lease, the financial company will rent the vehicle in its favor, which is mentioned in book R.C (registration certificate) of the vehicle as well as in the insurance policy. At the end of the tranche, the buyer receives from the financial company a certificate of completion of the payment. The RTO (Regional Transport Office of the Government) authorities will lift the mortgage in Book R.C and will also mention that the mortgage will be lifted with effect from a given date. . . .