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In the 1920s, the items people could purchase with an installment plan included: automobiles, automobile parts, household appliances, radios, phonographs, pianos, and furniture.
A hire purchase (HP), [1] also known as an installment plan, is an arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment (e.g., 40% of the total) and repaying the balance of the price of the asset plus interest over a period of time.
The 1920s was a decade of increasing conveniences for the middle class. New products made household chores easier and led to more leisure time. Products previously too expensive became affordable. New forms of financing allowed every family to spend beyond their current means.
By the 1920's almost everyone was using installment plans. The installment plan enabled people to buy goods over an extended period of time, without having to put down very much money at the time of purchase.
There is a myth of a lost golden age of economic virtue. Once upon a time, the story goes, people lived within their means and borrowed only under the direst of circumstances. Debt was shameful, and credit financed only “productive” purchases like homes or farm machinery. But nostalgia seldom makes good history.
In an address three years ago before the National Business Conference, Roger W. Babson said: “A distinct recession in business and possibly a panic within two or three years would not be surprising.…It will be the result of overextension of the instalment business, which today is eating into the vitals of business like cancer.”1 At the ...
Installment plans were put into major use during the 1920s, but had been used quite successfully in the decades before. They were used quite a lot with goods that had higher prices, such as automobiles, because the average American family normally couldn't afford to buy higher priced items in one payment.
