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Qualified Financial Adviser (QFA) Loans Exam 1 Practice Test

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During a hire purchase agreement, which statements are true?
Correct Answer:
(i) only.
Explanation:
In a hire purchase, you can use and enjoy the goods during the term, but you don’t own them until you’ve completed all payments. The seller keeps legal title while you’re paying, and at the end you typically gain ownership by exercising the purchase option or paying the final amount specified. This means statements that say ownership passes immediately, or that the hirer bears none of the risks or responsibilities until after ownership, aren’t correct. The only true point is that the hirer has the right to use the goods during the agreement (possession and use), while ownership remains with the seller until final payment.

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