Commercial hire purchase is a finance loan where you hire business equipment, a car, truck or other vehicle for a fixed monthly repayment over an agreed period.
It’s also called a term purchase, offer to hire, hire purchase, asset purchase, CHP or HP.
How do they work?
CAAA purchase the equipment or vehicle on your behalf. Then we hire it out to you over a contracted time frame. During this period, we still own the vehicle or equipment.
When your contract term is finished and you’ve paid in full, you own the equipment or vehicle.
What equipment does commercial hire purchase best suit?
It’s ideal for acquiring equipment that moves and large assets that have a service life of several years or more. For example:
- Manufacturing machinery
- Cars, trucks and commercial vehicles
- Computers and IT systems
- Cranes and construction equipment
What are the benefits of commercial hire purchase?
- Deposit option – if it suits, you can start your contract with a big payment
- Balloon payment on residual – you can make a large final payment at the end
- Flexibility – payments can be structured monthly, quarterly, half-yearly and yearly
- Short or long term contracts – from 1 to 5 years (or longer for amounts over $200,000)
- Easy budgeting – your repayments are fixed throughout so you always know what you’re up for
- Option to buy anytime – you can purchase the equipment/vehicle during the term of your loan
- Tax advantages – deductions available when used for business, and on depreciation
- Pay less GST – not charged on your monthly repayments or residual payment
- Claim on GST – for the equipment/vehicle cost if you are registered