Industry WIKI

A hire purchase (HP), also known as an installment plan, is an arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment (e.g., 40% of the total) and repaying the balance of the price of the asset plus interest over a period of time. Other analogous practices are described as closed-end leasing or rent-to-own.

A novated lease is a motor vehicle lease which has been novated, that is, the obligations in the contract have been transferred from one party to another. In Australia, it refers almost exclusively to the practice of salary packaging a motor vehicle using a novated lease.