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Commercial Hire Purchase
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Commercial Hire Purchase

Hire Purchase & What You Need To Know!buyer1



A Commercial Hire Purchase (CHP) is a commercial finance product where the customer hires the vehicle from the financier for a fixed monthly repayment over a set period. Commercial Hire Purchase can also be known as a Corporate Hire Purchase, Hire Purchase or Offer To Hire, and is often abbreviated as CHP or HP.


How does a Hire Purchase work?

Under a Commercial Hire Purchase arrangement, the financier agrees to purchase the car on behalf of the customer, and then hire it back to them over a set period, generally between 1 & 5 years. The customer has the use of the vehicle for the term of the contract but is not the owner of the vehicle, the lender is. At the end of the contract term when the total price of the vehicle (minus any balloon) and the interest charges have been paid in full, the customer takes ownership of the car.


Benefits of a Commercial Hire Purchase

Flexible contract terms ranging from 1 to 5 years

Balloon value (balloon or final instalment) may be placed on contract

Fixed interest rate for the term of the loan

Monthly repayments are fixed

Costs are known in advance

Deposit (either cash or trade-in) may be used

A tax deduction is available when the vehicle is used for business purposes

GST is not charged on the monthly rental or balloon payment (but is charged on fees and interest)

Customers registered for GST can claim the GST in the vehicle price, plus fees and interest

The finance is secured against the vehicle, allowing lower interest rates


Who does a Commercial Hire Purchase suit?

A Commercial Hire Purchase may be suitable for business (including companies, partnerships and sole traders, and some individuals) who account for GST on either an Accruals or Cash basis, the goods must be used predominantly for business use, which means greater than 50% Prior to 1 July 2012, Commercial Hire Purchase was commonly used by individuals receiving a car allowance and using their vehicle predominantly for business purposes, which means greater than 50%. However, due to changes to the GST treatment of CHP that came into effect on 1 July 2012 a CHP is now significantly less attractive in this circumstance, and employees with a car allowance may wish to consider other finance options.





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"Why choose Auto Link Finance for your Commercial Loans"

Auto Link Finance Pty Ltd is a company that “will work for you” from start to finish in order to provide you with the best possible solution. We guarantee the best rates and lowest repayments on the market available to you based on your profile and credit history, and you can feel comfortable knowing that you are dealing with an expert in the field of finance with over 27 years’ experience in the finance industry. Regardless of whether you have had good or bad credit, we can help you with commercial financing.

Free credit assessment, No application refused even if you want commercial financing with bad credit, Fixed rates, fixed repayments & Servicing customers Australia wide

Need More Information!

If you require more information on hire purchase loans, please call 1300 982 279 and speak with an experienced finance consultant.