Hire-purchase installments: are you quoting right?

Abstract

This paper is concerned with the practice in the financial sector to quote hire-purchase installments for 100% finance schemes and deposit linked hybrid finance schemes on the basis of equal IRRs. The paper shows the inherent problems in the methodology adopted by the industry and highlights the extent to which the industry may be under quoting in cases of its hybrid schemes and presents a more equitable approach to quotations for different schemes, the paper also presents a more acceptable approach to such quotations.