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Simple Guide about Commercial Hire Purchase

Simple Guide about Commercial Hire Purchase

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Simple Guide about Commercial Hire Purchase

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  1.   One​​80​​Financial​​Services​​Pty​​Ltd  September​​26,​​2017  Simple​​Guide​​about​​Commercial​​Hire  Purchase    A commercial hire purchase is basically an agreement between the owner of the asset which is the               financier and the hirer. In return of regularrepaymentsfortheassets,thehirercantakepossessionof                 the assets but cannot own them till the final payment is made to the owner or financier. Once the                   payment​​is​​done,​​you​​can​​take​​full​​possession​​of​​your​​assets.                                                               The ​commercial hire purchase is available to any business professionals, either as individuals, partnerships or companies. It is used to purchase goods like vehicles, plan equipment,motorhomes,                 earthmoving machinery, etc. If you havepurchasedanyassetwithin6monthsyoucanrefinanceback             either​​as​​a​​sale​​or​​buyback.                                                            Your finance company will pay for the asset directly to theassetdealerandyouasahirerhavetopay                 the balance plus interest charges monthly over a fixed period of time. Generally,therepaymentlasts                 between 12 and 48 months. Regardless of interest rates, you need to pay the monthly paymentsina                 fixed amount. Although, the repayment term is fixed, you can also repay in full and settleyourcredit               agreement​​with​​the​​financier​​at​​any​​time.                                                                                       If you are settling your amount early, you may get benefit from a rebate of interest. The finance                   company registers a financial interest, which is removed when you make a final payment. It is               observed that a maximum number of people use commercial hire purchase to buy their vehicles,               commercial​​vehicles,​​etc.                                                          1   

  2.       What​​​​is​​​​needed​​​​from​​​​the​​​​Hirer?  The majority of finance agreements needadeposit.Thefinancecompanieslookforanamountthatis               appropriate to the individual hirer’s circumstances. Theyalsoconsiderthevehiclevalueandmileage.           Usually,​​the​​finance​​companies​​take​​a​​minimum​​of​​5%.                                        Hirers will need to submit their driving license that is used as proof of identity and for cross                 verification of the signature. Usually, the hire purchase traders are responsible and they offer               appropriate andaffordableloantotheircustomers.Afewfinancecompaniesrequirebankstatements             so as to establish some affordability and stability.Also,asacustomer,youmayberequiredtosubmit                 a​​certificate​​of​​comprehensive​​insurance.                                                                        Benefits​​​​of​​​​Hire​​​​Purchase:  Here​​are​​few​​advantages​​of​​choosing​​hire​​purchase:   No​​large​​upfront​​investment​​as​​the​​cost​​of​​the​​asset​​is​​repaid​​by​​monthly​​installments.  The​​fixed​​monthly​​installments​​will​​not​​alleviate​​even​​if​​a​​bank​​increases​​its​​interest​​rates.  You​​will​​own​​the​​asset​​once​​your​​loan​​is​​settled.   You​​do​​not​​have​​to​​pay​​VAT​​on​​monthly​​installments.   Many​​finance​​companies​​do​​not​​need​​any​​deposit.  As the asset is financed by the financier andthecompanyownsittillthelastpaymentispaid,                   it​​makes​​it​​a​​sufficient​​security​​in​​most​​cases.   You​​can​​bespoke​​your​​repayments​​according​​to​​your​​cash​​flow.  You​​can​​repay​​the​​loan​​amount​​in​​full​​at​​any​​time.  ● ● ● ● ● ●                     ● ● Disadvantages​​​​of​​​​Hire​​​​Purchase:  Here​​are​​a​​few​​disadvantages​​of​​the​​hire​​purchase:  The loan is secured against the asset. Thus, the asset can berepossessedifpaymentsarenot                 paid.  Failing​​to​​pay​​any​​loan​​amount​​negatively​​affect​​credit​​rating.  The​​financier​​is​​the​​legal​​owners​​of​​the​​assets​​until​​the​​loan​​amount​​is​​paid​​in​​full.  Repayment​​amount​​can​​change​​if​​there​​is​​a​​change​​in​​interest​​charges.                    ● ● ● ● Commercial Hire purchase is best if you do not have any financial support from anyone. Hope this                   Guide​​Document​​​​is​​a​​perfect​​guide​​about​​Commercial​​Hire​​Purchase.​​Stay​​tuned​​for​​more​​updates.                     2