Business Vehicle CHP: Compare Commercial Hire Purchase Rates, Source Cheaper Quotes
Commercial Hire Purchase (CHP), or simply Hire Purchase, is a business finance facility used for the acquisition of a wide range of assets including motor vehicles. Unlike the name may infer, CHP is not a short-term hire or rental of goods but financing with the end outcome ownership. While not as widely used as Chattel Mortgage and Leasing, CHP is preferred by many business owners and is included in our portfolio of business car loan product selection.
Commercial Hire Purchase for motor vehicle purchases can present significant tax benefits to business operators and CHP does attract an interest rate usually on par with Chattel Mortgage – the lowest across the selection.
It may suit a wide range of business structures and is considered best suited to those implementing the cash method of accounting but way also be suitable to this using the accruals method. Referring to the business accountant when considering choice of the business finance product is strongly advised.
We provide highly competitive CHP quotes for the acquisition of all types of vehicles to be used in a business operation – SUVs, vans, wagons, utes, small trucks, passenger cars, executive sedans, MPVs and limousines. CHP can be arranged for new and used vehicles purchased through authorised dealers, through auction houses or by private sale.
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Commercial Hire Purchase (CHP) for Motor Vehicles: Key Features
The lending sector terminology around Commercial Hire Purchase is that the lender essentially purchases the vehicle and ‘hires’ it to the business borrower. A set hire payment is made monthly over a fixed finance term.
- During the term of the CHP, the business has full usage of the vehicle and is responsible for the relevant running costs and expenses.
- May suit both cash and accruals accounting methods.
- Hire purchase interest rates are fixed over the full term – Easy sources CHP terms that deliver a hire or repayment amount that works with cash flow.
- CHP terms are fixed with up to 7 years/84 months achievable.
- Fixed rates, fixed terms, fixed repayments – allow business operators to plan future acquisitions and prepare budgets to implement business plans.
- Interest on the CHP monthly payments is tax deductible.
- The full amount of the monthly payment is not tax deductible, only the interest component.
- GST is not applicable on repayments.
- The GST is claimed for the entire purchase price by the business borrower on the corresponding BAS return.
- Balloon is optional. This is a portion of the loan amount which is due as a lump sum at the end of the CHP term. Balloon may be paid in full or refinancing applied for.
- A tax benefit can be realised through depreciation of the motor vehicle according to the ATO schedules. Vehicles may be eligible for accelerated asset depreciation measures when available.
In some ways, Commercial Hire Purchase for business vehicles may be seen as a combination of some of the features of both Leasing and Chattel Mortgage.
If CHP is of interest for financing your new motor vehicles, contact Easy Car Finance for a quote on Commercial Hire Purchase for Business Vehicles. Single vehicle and fleet quotes available, highly competitive rates and quick service!
Save time and save the trouble of sourcing CHP quotes from multiple banks and lenders. Take an Easy break and request a quote from us.