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Commercial Hire Purchase

Hire purchase car loans help you acquire the car of your choice on a repayment schedule that you can afford.

Commercial hire purchase (CHP) loans allow you to make monthly instalments towards the purchase of a car, while at the same time allowing you to use the car. The difference between this car loan and others is that the financier purchases the car on behalf of the customer, then hires it back to the interested buyer until all loan payments are completed. Although the customer can use the car, he or she is not the real owner of the car.

Hire purchase could be a good loan option for business owners as they don’t have to tie down funds into buying a car, but can easily make manageable monthly payments.

Stratton Finance New Car Loan

Stratton Finance New Car Loan

From

5.29 % p.a.

fixed rate

From

6.56 % p.a.

comparison rate

  • Rates from 5.29% p.a.
  • Loan terms 1-7 years
  • Fast approval
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100% confidential application

Stratton Finance New Car Loan

Benefit from Stratton's expertise to get a fixed or variable rate car loan.

  • Interest rate from: 5.29% p.a.
  • Comparison rate: 6.56% p.a.
  • Interest rate type: Fixed
  • Application fee: $459.20
  • Minimum loan amount: $18,000
  • Maximum loan amount: $100,000
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Comparison of car loans vs hire purchase

Whilst we don't compare hire purchase leases, below are a range of car loans. Once you're comfortable comparing you can make an informed decision.

Rates last updated September 19th, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
Stratton Finance New Car Loan
From 5.29% (fixed)
6.56%
$18,000
1 to 7 years
$8.90
$459.20
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Loans.com.au - New Car Loan
5.44% (fixed)
5.99%
$5,000
3 to 5 years
$0
$400
You'll receive a fixed rate of 5.44% p.a.
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.
IMB New Car Loan
5.89% (fixed)
6.24%
$2,000
1 to 7 years
$0
$250
You'll receive a fixed rate of 5.89% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
Latitude Car Loan
From 6.99% (fixed)
8.1%
$5,000
1 to 7 years
$10
$295
You'll receive a fixed rate between 6.99% p.a. and 14.99% p.a. based on your risk profile
Finance a new or used car up with loans from $5,000 and benefit from flexible repayments.
Beyond Bank Low Rate Car Loan
From 5.69% (fixed)
5.97%
$25,000
1 to 7 years
$0
$175
You'll recive a fixed rate of 5.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
IMB Secured Personal Loan
6.89% (fixed)
7.24%
$2,000
1 to 5 years
$0
$250
You'll receive a fixed rate of 6.89% p.a.
Benefit from this competitive rate by securing the loan with a vehicle up to 6 years old. Use this flexible loan for any purpose.
CUA Secured Fixed Car Loan
6.79% (fixed)
6.92%
$5,000
1 to 7 years
$0
$0
You'll receive a fixed rate of 6.79% p.a.
A secured loan with a high maximum borrowing amount up to $100,000. Redraw facility and no monthly fees.
Bank of Melbourne Secured Car Loan
From 8.49% (fixed)
9.6%
$3,000
1 to 5 years
$12
$195
You can choose a fixed or variable interest rate.
Finance a new or used vehicle and have your choice of interest rate type with this flexible loan.
RACV New Car Loans
From 5.99% (fixed)
6.55%
$15,000
1 to 7 years
$0
$399
You'll receive a fixed rate of 5.99% p.a.
A larger loan of $15,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
RACV Personal Loan
From 6.99% (fixed)
7.55%
$5,000
1 to 7 years
$0
$399
You'll receive a fixed rate of 6.99% p.a.
A secured personal loan with a competitive rate to help you fund a range of purposes. Benefit from no ongoing fees.
RACQ Bank New Car Loan
6.17% (fixed)
6.72%
$3,000
7 years
$0
$395
Finance a new car or one less than 2 years old. Benefit from no monthly fees or penalties on early repayments and discounts on car maintenance.
MyState Secured Personal Loan
From 7.99% (variable)
8.96%
$10,000
1 to 10 years
$10
$200
You'll receive a variable rate of 7.99% p.a.
A secured loan up to $75,000 that you can have up to years to repay. Early repayments and redraw facility available.

Compare up to 4 providers

How does a commercial hire purchase car loan work?

As the name suggests, this is a commercial financial product and the applicants for such a loan would be businesses. This includes sole traders, partnerships and companies. Due to the nature of the loan, it is also referred to as corporate hire purchase or offer to hire. During the duration of the loan term, the borrower is not the owner of the car and although they can use the car as they wish, the car will only be transferred to their ownership when they finish making payments. That is after the total price of the vehicle has been repaid, including any interest charges.

This is a flexible loan contract and one that is usually placed on a fixed interest rate. The borrower is able to identify the real cost of the car since monthly repayments are fixed. Some lenders will require a deposit or down payment, while in other cases trade-ins may be used.

How to compare commercial hire purchase vehicle loans

  • Interest rates.
    You need to compare the interest rates with any loan you take out. Different lenders will offer different rates and this contributes to the overall cost of the loan.
  • Repayment flexibility.
    Hire purchase loans are normally repaid with fixed monthly payments. You need to find out how flexible the lender will be when it comes to your repayments and whether you will be allowed to adjust your monthly payments.
  • Loan features.
    Not all lenders require down payments and some will be willing to take a trade-in as your deposit. Compare the loan features that different lenders offer and evaluate them to find one that is most suitable for your needs.
  • Fees.
    What are the fees you would be looking at with different lenders? Note that you will not be charged GST on your monthly or residual payment.

Pros and cons

Pros

  • Tax deductions. The borrower, who is also the hirer in this case, can claim depreciation and interest charges on the contract. Your monthly rental and residual payments are also not charged GST.
  • Flexible repayments. Hire purchase repayments tend to be quite flexible. The loan contracts are flexible and may range from one year to five years. Although the monthly repayments are fixed, you have the option of balloon payments which help you manage your loan according to your cash flow.
  • Automatic ownership upon repayment. The vehicle is automatically transferred to the hirer for ownership upon completion of payment.

Cons

  • You don’t own the car. Throughout the duration of the loan, you are the hirer and not the owner of the car. Defaulting on repayments may cost you your payments.
  • It may not be cheap. Hire purchase loans are just like car dealer loans in that they could be expensive when compared to ordinary personal loans.

Things to avoid before applying

  • Defaulting. Remember that you do not own the car, so the implications of defaulting on payments may cost you all the other payments you’ve made. If you keep defaulting on payments, the financier may decide to take back their car.
  • High debt. Again, you don’t own the car until you fully settle the loan amount and interest. It’s therefore important to make smart financial decisions when it comes to the choice of car. The choice is yours and you might want to consider going for a car that is well within your budget. You need a loan that is manageable.

How to apply for commercial hire purchase car loan

Companies, partnerships, sole traders and individuals are all eligible for commercial hire purchase car loans. However, the car needs to be for business use or income purposes. Before you can apply for a commercial hire purchase car loan, it’s recommended that you use the comparison table on this page to compare what different lenders are offering. You can click on the lender’s link to access their website for more information.

You can choose to apply for the loan online, which is convenient, or physically at the lender’s offices. With both application methods, the lender will require that you fill out an application form and supply personal and financial details.

Use our Hire Purchase Calculator

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Car Loan Offers

Important Information*
IMB New Car Loan

You'll receive a fixed rate of 5.89% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.

Loans.com.au - New Car Loan

You'll receive a fixed rate of 5.44% p.a.
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.

Latitude Motor Vehicle Loan

You'll receive a fixed rate between 6.99% p.a. and 14.99% p.a. based on your risk profile
Apply for a loan from $5,000 to finance a new or used car. Flexible repayments and options to finance a classic car.

Stratton Finance New Car Loan

You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.

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