Lesson Notes By Weeks and Term - Senior Secondary School 3

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  4. Hire purchase/deferred payment

Term: 1st Term

Week: 6

Class: Senior Secondary School 3

Age: 17 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:    Commerce

Topic:-      Hire purchase/deferred payment

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Explain the meaning of hire purchase and deferred payment
  2. Discuss the features, advantages and disadvantages of hire purchase and deferred payment

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on laws of agency

Students pay attention

STEP 2

EXPLANATION

She explains the meaning of hire purchase and deferred payment

 

Students pay attention and participates

STEP 3

DEMONSTRATION

She further discusses the features, advantages and disadvantages of hire purchase and deferred payment

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

HIRE PURCHASE, INSTALLMENT PAYMENT AND DEFERRED PAYMENT

HIRE PURCHASE
Hire purchase is an arrangement for buying expensive consumer goods, where the buyer makes an initial down payment and pays the balance plus interest in installments

 

FEATURES OF HIRE PURCHASE

  1. Cash price is stated.
  2. Agreement is documented in writing.
  3. It requires an initial deposit.
  4. The installment payment is broken down into the time specified and the amounts to be paid per time
  5. It is used for durable goods.
  6. Seller has the right of repossession.
  7. Buyer can take possession and not ownership until payment is completed then there is a transfer of ownership.

 

ADVANTAGES OF HIRE PURCHASE TO SELLERS.

  1. Increase in turnover and profit
  2. Enable sellers to dispose of expensive goods.
  3. The sellers can charge higher prices for goods.
  4. Sellers can repossess the goods.
  5. Sellers retain ownership until full payment is made.

 

DISADVANTAGES TO SELLERS

  1. Customers may fail to pay at the appropriate time.
  2. Additional cost may be incurred as a result of court persecution in the case of a default.
  3. Capital may be tied down.
  4. It might turn out to be an irrecoverable debt.

 

ADVANTAGES OF BUYERS

  1. Buyers enjoy the use of goods even when they have not fully paid for it.
  2. It affords buyers the opportunity of acquiring expensive goods.
  3. It improves the customer’s standard of living.
  4. Buyers can return goods to seller before completion of payment.
  5. Buyers have access to credit.

 

DISADVANTAGES TO BUYERS

  1. Buyers may pay more for the goods.
  2. They can buy more than what they can afford to pay for.
  3. The customers may not be able to negotiate better conditions of sales.
  4. The interest rate may be very high
  5. They might end up at the wrong end of the law due to default in payment

 

 

DEFERRED PAYMENT

A deferred payment option is a right to operationally defer (delay)

payment on an investment until a later date.

 

FEATURES OF DEFERRED PAYMENT

  1. Ownership and possession are transferred immediately to the buyer.
  2. Less durable goods are involved.
  3. Sellers cannot repossess the goods.
  4. Lower price is charged.

 

ADVANTAGES OF DEFERRED PAYMENT

  1. It helps the buyer to save money
  2. It can improve the buyers overall well-being
  3. It can be a form of succor for customers going through financial

hardships or unusual circumstances

  1. Buyers can avoid selling valuable assets due to inability to afford the

product or service the payment is being deferred for

 

DISADVANTAGES OF DEFERRED PAYMENT

  1. Interest is accrued during the period of deferment
  2. In some cases, buyers are subjected to additional fees
  3. Sometimes the buyers are asked to an extreme prove their financial

hardships

EVALUATION:   1. Explain the meaning of hire purchase and deferred payment

  1. Outline the features, advantages and disadvantages of hire purchase and deferred payment

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively