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