Commercial Hire Purchase

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 of time.

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 Commercial Hire Purchase Work?

Under a Commercial Hire Purchase (CHP) arrangement the financier agrees to purchase the car on behalf of the customer, and then hire it back to them over a set period of time. The customer has the use of the vehicle for the term of the contract but is not the owner of the vehicle.

At the end of the contract term when the total price of the vehicle (minus any residual) and the interest charges have been paid in full, the customer takes ownership of the car.

Features Of A Commercial Hire Purchase:

The benefits of a CHP include, the choice of financing 100% of invoice price OR contributing some form of deposit, applicable depreciation and interest is usually tax deductible, monthly payments that can be structured to suit your cash flow, guaranteed end ownership of the goods, the option to purchase the equipment at any time during the term of the contract, and all equity in goods is retained by you.

Minimum Amount: $15,000
Maximum Amount: $50,000,000
Application Fees: $0
Available Terms: 2 5 years
Rate Types: Principal & Interest (Fully Amortised)
  • Residual value (balloon or final installment) may be placed on contract
  • Fixed interest rate
  • 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 residual payment
  • Customers registered for GST can claim the GST in the vehicle price
  • The finance is secured against the vehicle, allowing lower interest rates

A CHP facility permits flexible repayments, structured to suit your cash flow. You can vary the money you pay to match the money coming into your business. For example crop sowing time vs crop harvest time. As with both Leases and CHP facilities you have the option to include a balloon or residual payment and our flexible terms mean you can choose the length of the asset purchase. The life of an asset purchase usually depends on two things: how much you want to pay per month, and the life of the asset you shouldnt be paying off equipment that is no longer contributing towards your income!

Who Does A Commercial Hire Purchase Suit?

A Commercial Hire Purchase (CHP) is suitable for:

  • Companies
  • Partnerships and sole traders who account for GST on an Accruals basis, and
  • Individuals using the vehicle for business purposes.

Apply For A Commercial Hire Purchase

Got all the info you need and ready to apply for a Chattel Mortgage? Just complete our quick application form and one of PCL Moneys Commercial Hire Purchase experts will get in contact with you.

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