It is a human characteristic to desire for more and be greedy. When you have something you quickly start to lose its value and carve for something better. This is applicable to all desires and needs of humans. While the basic needs are necessary to fulfil, satisfying this craving for other luxuries can prove to be quite costly. When it comes to purchasing a car, if you own one you quickly want to have a better one and if you do not own one you desperately desire to own a car of your own.

Why isn’t this possible then? Why can’t people own their own cars when a huge majority of them wish so much to have one and drive one? The answer is obvious; it is because of lack of finances! This is not just restricted or limited to cars and bikes but to almost all the products and services that money can buy. In today’s world, though you are poor, it is quite possible that you own your own vehicle. In traditional system the give and take policy was quite simple. Give money and take away what you want to buy. Today, given the increased competitiveness in the market, retailers have changed the way purchase can be made. You must be well aware of purchasing goods and services on an instalment basis where instead of paying lump sum you get to pay in parts every month for a period until the entire amount is paid. The instalment plan is quite popular in the market now and a large majority of big scale online retailers have facilitated norms to enable purchase by customers on an instalment basis. However, this is not the end as there is more to it: thein-house financing system.

This financing system enables the company or the firm personnel to provide loan to the customers. Not all customers might have enough money to purchase the products or services that the company sells. With the help of in house finance system, the money given to the customers by the company is paid back to the company itself as a cost of purchasing the product. So what basically happens is that a customer wants to buy a product from a company and he takes a loan to purchase the product and completes the purchase. But in this scenario, the loan given to the customer was by the same company whose products he/ she was purchasing.

Why would the company lend money: Lending money is the activity that a bank or a financial services firm carries out. Then why is the company losing its money by lending loans. It is because it drives sales and business. Now once the customer takes a loan, he is bound to return it so the money is given back to the company but this is the second time. It is equivalent to delaying the payment of the product but it is different from selling on a credit basis. This enables those customers to make a purchase who otherwise might not have been able to buy it. There is a huge chunk of world population who fall in this category and in-house financing  thus caters to their needs as it also drives the sales of the companies. This system of in house finance is quite prevalent in the automobile market especially where paying the entire amount upfront might be a little bit of a financial burden to most customers.  It is also present in other industries on a lower scale and has been enjoying success in all those sectors in which it has been adopted.