A Commercial Hire Purchase is generally suitable for businesses using the “accruals” method of accounting for GST, or for individuals who used their motor vehicle for business related purposes. Under the “accruals” method, the GST component of the purchase price of the motor vehicle (or other asset) can be claimed back on the next BAS, rather than claiming the GST over the term of the finance contract.
A hire purchase arrangement is an agreement to purchase vehicles, plant or equipment subject to payment terms. During the term of the agreement, the Bank or Finance Provider owns the vehicle, plant or equipment. Ownership is automatically transferred to you when you make the final payment. You also have the option to purchase the equipment at any time during the term of the agreement.
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Commercial Hire Purchase is also referred to as a Hire Purchase, CHP, HP, Term Purchase, Asset Purchase, Corporate Hire Purchase.