Truck Commercial Hire Purchase (CHP)
Truck Commercial Hire Purchase (CHP) is a commercial finance facility where a business “hires” a truck from the financier for a fixed monthly repayment over a term, and has the option to purchase the truck at the end of the term. Under a CHP arrangement the financier agrees to purchase the truck 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 truck or vehicle.
The Benefits of a CHP Are:
1.Residual value (balloon or final instalment) may be placed on contract
2.Fixed interest rate
3.Monthly repayments are fixed
4.The finance is secured against the vehicle, allowing lower interest rates
5.Costs are known in advance
6.Flexible contract terms ranging from two to five years
7.Deposit (either cash or trade-in) may be used
8.A tax deduction may be available when the vehicle is used for business purposes
9.GST is not charged on the monthly rental or residual payment
10.Customers registered for GST can claim the GST in the vehicle price
11. A CHP is suitable for companies, partnerships, traders and individuals using the vehicle for business purposes.
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