Credit / Finance Agreements

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This involves the purchase of goods through finance whereby the repayments are spread over a period of weeks, months or years. In the case of hire purchase and conditional sale agreements the goods are not owned until the final repayment has been made. A typical example is car finance. A deposit is usually payable. Interest and other charges will be added to the cash price.
 
Taking credit from the seller is often the most expensive option. Many shops prefer to sell items on credit because they have strong links (and sometimes ownership) of a finance company. This means that the shop can afford to sell the items cheaply and then make the real money on the finance.
 

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