Discover the benefits of Hire Purchase finance
It's common for businesses to enter into hire purchase or leasing agreements to pay for vehicles and equipment over a period of time instead of paying the full cost up front and potentially drying up cash flow.
With a hire purchase, the lender purchases the car on your behalf; you are in effect hiring the car with the intent to buy it off over a period of time. You can choose the car you want but you don’t own it until you have paid the last installment.
Because of the type of loan and the way it is structured, the interest on your repayments and the depreciation of the vehicle are tax deductible if the vehicle is used for business purposes.
Key benefits of a Hire Purchase car finance option include:
- Transference of ownership on final repayment
- Fixed repayments for the duration of the loan
- Flexible loan term
- Initial deposits can be made to reduce the loan amount
Hire Purchase lets you pick a car that suits your needs and is most effective for businesses that use the accrual accounting method as it offers the business ownership for tax purposes and allows for full Tax Input Credit for the GST on the purchase at their next BAS lodgement.
If a Hire Purchase finance option sounds like something you might be interested in, feel free to apply online today.