Key highlights
- Lender buys the vehicle and hires it to your business
- Fixed repayments with a clear path to ownership
- Compare against chattel mortgage and finance lease
- Suits cars, utes, vans and light commercial vehicles
- One broker compares 80+ lenders for ABN businesses
Commercial hire purchase, often shortened to CHP, is a long-standing way for businesses to finance a work vehicle. It has a distinctive ownership arrangement that sets it apart from other structures. This guide explains the essentials.
How does commercial hire purchase work?
Under a commercial hire purchase, the lender buys the vehicle and hires it to your business over an agreed term. You have use of the vehicle throughout, and ownership typically transfers to your business once all payments, including any final amount, are made.
When does CHP suit a business?
CHP can appeal to businesses that want fixed repayments and a clear path to ownership across cars, utes, vans and light commercial vehicles. How it is treated for GST and tax differs from other structures, so this is an important point to discuss with your accountant or registered tax adviser.
CHP versus a chattel mortgage or lease?
Whether CHP, a chattel mortgage or a finance lease fits best depends on your accounting preferences, cash flow and how long you plan to keep the vehicle. There is no single right answer, which is why comparison helps.
How do you compare CHP options?
At Overdrive you deal with one broker, Managing Director Simon Kendrick, who compares 80+ banks and non-bank lenders for ABN businesses. Ask for an indicative quote and a soft check with no obligation.
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