1300 Car Finance

Commercial Hire Purchase

Hire Purchase Finance is finance for goods that will be used primarily for business use (50% or greater). It can also be known as a Corporate Hire Purchase, Asset Purchase, Commercial Hire Purchase, Offer to Hire, CHP or more commonly as a HP.

What is Commercial Hire Purchase Finance?

Commercial Hire Purchase Finance agreement is where the financier agrees to purchase the car on behalf of the customer and the customer in turn hires the car from the financier over an agreed period of time for a fixed monthly repayment.

The ownership of the vehicle is not transferred to the customer until the final payment has been made. (This includes any residual/balloon)

Under a Commercial Hire Purchase Finance agreement, the customer is the registered owner of the vehicle and is responsible for the all costs associated with maintaining, running and insuring the vehicle.

Who is Eligible for Commercial Hire Purchase Finance?

A requirement of Commercial Hire Purchase Finance is that it is to be used predominately for business use; therefore the product is extended to ABN holders and individuals who receive a Car Allowance.

Companies, Trusts, Sole Traders, Partnerships can also benefit through Commercial Hire Purchase Finance.

Benefits of Commercial Hire Purchase Finance?

• The interest charges maybe tax deductible.
• You can claim the depreciation as a tax deduction.
• Flexible loan terms to suit your cash flow requirements or budget (1-5 years).
• Residuals/Balloons can be structured to reduce your repayments.
• Fixed interest rate.
• Fixed monthly repayments.
• Interest is calculated on the outstanding principal balance, so any additional payments you make will reduce the total interest payable.
• You can obtain pre-approval before you go shopping, giving you greater bargaining power.

Commercial Hire Purchase Finance and Tax

Commercial Hire Purchase Finance allows the hirer to claim an input tax credit for the GST component of the purchase price, provided that the customer is registered for GST.

In addition to the input tax credit, the customer may claim the Interest and the depreciation on the vehicle as an expense as well as all running costs.

The information provided is general information and therefore may not suit your individual circumstances. You should consult your accountant if you need further information.

Need a car finance quote?

For more information or if you have any questions about Commercial Hire Purchase Finance, just call 1300 Car Finance thats 1300 227 346 and speak to a qualified finance consultant or why not complete our friendly online finance enquiry form and a experienced finance consultant will contact you shortly.