Distinction between hire purchase and financial lease :
Both hire purchase and financial lease are methods of financing an asset. In both cases, lessor (in case of lease) and owner (in case of hire purchase) continue to have ‘property’ over the goods during period of lease/hire purchase.
Financial lease is theoretically 100% finance (less security deposit taken, if any, from lessee). Hire purchase need not be 100% finance. Provisions relating to depreciation are different.