When does a business gain ownership of an item bought through hire purchase?

In a hire purchase agreement, ownership of the item is transferred to the buyer only once all instalments have been paid in full. Until the final payment is made, the seller retains legal ownership of the item. This means that the buyer is essentially renting the item until they have fulfilled their financial obligations under the terms of the hire purchase agreement.

Options suggesting ownership prior to completing all payments, such as upon agreement to purchase or after the first payment, misrepresent the nature of hire purchase agreements. Similarly, suggesting ownership at the end of the lease term does not apply in this context, as it specifically relates to leasing arrangements rather than hire purchase. Therefore, the correct understanding is that full ownership is only attained once all instalments have been completed.