<Table> <Tr> <Td> </Td> <Td> This article needs additional citations for verification . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (January 2009) (Learn how and when to remove this template message) </Td> </Tr> </Table> <Tr> <Td> </Td> <Td> This article needs additional citations for verification . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (January 2009) (Learn how and when to remove this template message) </Td> </Tr> <P> A hire purchase (HP) or known as installment plan in the United States 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 repays 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 . </P> <P> The hire purchase agreement was developed in the United Kingdom in the 19th century to allow customers with a cash shortage to make an expensive purchase they otherwise would have to delay or forgo . For example, in cases where a buyer cannot afford to pay the asked price for an item of property as a lump sum but can afford to pay a percentage as a deposit, a hire - purchase contract allows the buyer to hire the goods for a monthly rent . When a sum equal to the original full price plus interest has been paid in equal installments, the buyer may then exercise an option to buy the goods at a predetermined price (usually a nominal sum) or return the goods to the owner . </P>

What was hire and purchase system in usa