Understanding a commercial hire purchase
If you need a vehicle, asset or equipment for your business, a commercial hire purchase (CHP) may be a good option.
We work with a panel of major lenders for find you the right finance tailored to your business, we’ll work hard to find you a competitive option to suit your needs.
How does it work?
Essentially, the legal title remains with Aussie until you’ve paid all your hire charges. The great thing about CHP is that your repayment amounts are set over a fixed period of time, which makes budgeting a breeze.
Plus, at the end of your term, you’ll have the option to purchase the vehicle or equipment.
What are the benefits?
CHP can be a great option for your business, with benefits like:
- Entitlement to an input tax credit on the GST components of your business
- Tailored payment options, adjustable up-front deposit and/or final instalment amounts
- Possible seasonal payments
- Possible tax deductions for interest charges and depreciation – if the vehicle or equipment is used to generate income.
What are the tax implications?
Under a CHP agreement, you’ll need to pay GST on the purchase price of the vehicle or equipment, as well as on any associated fees and charges. When it comes to understanding how tax can impact your business, it’s best to seek out independent professional advice.
What other options should I think about?
The one thing worth noting are the changes in the GST treatment of CHP – as of 1 July 2012. This means employees with a car allowance who use their vehicle chiefly for business purposes might find a novated lease to be a better fit.
We’ll make the process easy.
Apart from the benefits above, arranging a CHP with Aussie is a personalised and easy experience. And for added peace of mind, we can even arrange pre-approved finance for your next purchase.