Hire Purchase
A Hire Purchas (HP) is a commercial finance option where the individual or company, hires the vehicle from the finance company for a monthly payment. A Hire Purchase is also know as a CHP, HP, Commercial Hire Purchase or Term Purchase. If you have heard of one of these terms, then you have heard of a Hire Purchase.
How does a Hire Purchase work?
With a Hire Purchase (HP) the financier is agreeing to purchase the motor vehicle from the dealer and hire it back to the customer. The customer can request the term and structure of the HP and has use of the vehicle for the contracted time. Once all rental payments and the residual (balloon) is paid, the customer becomes the owner of the motor vehicle. The customer assumes responsibility of the vehicle until these rentals are paid.
Benefits of a Hire Purchase
- Fixed interest.
- Terms from 3 years to 5 years.
- Knowledge of fixed costs for this term.
- Tax effective.
- Flexible in terms and residuals (balloons)
- You can use a trade in or cash to lower your commitment.
- No GST is applicable or charged on the loan.
- Secured on the vehicle, reducing interest commitments.
- ABN holders can still claim the GST on the vehicle.
Will a Hire Purchase suit you?
A Hire Purchase is only suitable for individuals, partnerships or companies who will be using the vehicle for predominately business use. From a GST perspective, most customers or companies who have their GST set up as "Accrual" find the Hire Purchase the most attractive. This means that these entities are able to claim the claimable amount of GST on the motor vehicle up front. If your GST is set up as cash, you may want to consider a Chattel Mortgage option or you can claim the GST on the vehicle over the term of your Hire Purchase.
Want to know what our customer say about Hire Purchasing with McCarroll's Financial Services?
Click here Testimonials to see what our customers say.
Need to know more?
If you have any questions or concerns, please go to our "make an inquiry" tab just below and and send us your questions. Don't forget, when it comes to finance and your money, there is no such thing as a silly question.
Something to download!
The following is an information pack on the different loan options that you have available to you. They will point out a few different points along with giving you the option of what term and residual (Balloon) you can have. It has an application form attached, so if you like what you read, please complete and return via fax.
 | Business Loan Packages | [download, 234Kb] |
| Download and know your options. | ||