Hire Purchase
Get into a car for a fixed term.
A hire purchase is a simple way of getting into a car for a predetermined amount of time. A lender will purchase a vehicle for you, on your behalf, and hire it out to you for a fixed monthly payment. For motor vehicle hire purchase Australia, the interest rate stays the same for the loan’s duration. You are responsible for paying all costs involved with operating the vehicle (which include insurance, registration and general maintenance) and you do not fully own the car until all outstanding monies are repaid in full.
Commercial hire purchase.
This type of product is best suited to someone who would use a vehicle primarily for business, that is, for commercial hire purchase agreements. Primary hire purchasers include sole traders, trusts, companies, ABN holders and those who receive a vehicle allowance as part of their employment.
Here are some facts regarding commercial hire purchase:
- Interest rates and repayments are fixed for the life of the loan
- Loan contracts are generally run over the course of 1-5 years
- The vehicle is yours once the final payment is made (including any residual balloon amounts)
- The interest itself, as well as the depreciation, can be claimed as a tax deduction and there are special arrangements for claiming any GST component of your commercial hire purchase agreement.