In western countries people have been using the installment plan since the first half of the twentieth century.Today, a large proportino of all the families in Great Britain buy furniture,household goods and cars by installment . In the U.S.A.,the proportion is much higher than in Great Britain, and people there spend over 10percent of their income on the installment plan.
The goods bought on the installment plan are in almost every case, goods that will last --radios,televisionsets,washing machines,refrigerators,motorcars,motorcycles, and furniture.
The prece of an artecle bought in this way is always higher than the price that would be paid by cash .There is a charge for interest.The buyer pays a proportion, perhaps one-quarter or one-third,of the price as a down payment when the goods are edlivered to him.He then makes regular payments,weekly or monthly, until the full price is paid up. The legal ownership of the goods remains with the seller until the final payment has been made.
Installment buying has advantages and disadvantages. In the past it was easy to find couples who had been saving for years in order to furnish their homes.Now,they don't have to do that.Installment buying can help couples with small incomes to furnish their homes and start housekeeping. It increases the demand for goods ,and in this way helps business and employment. |
