Commercial hire purchase agreements are typically used by individual business customers who wish to place a deposit into their finance contract or nominate the value of the balloon (final installment) on their contract. This type of contract offers maximum flexibility to set the monthly repayment amount to suit individual circumstances.
Chattel mortgage is an ideal way for individual business customers to maximise the taxation benefits gained from financing a new vehicle. It is designed for those sole traders and partnerships who account for their business operations on a cash basis and can be used for purchasing a new vehicle or upgrading an existing vehicle.
A novated lease is a three-way agreement between:
- A car financier
- Your employer
- An employee (you)
You obtain car finance for a car of your choice from the finance provider, for a fixed period of time. Your employer then takes the repayments out of your “pre-tax” salary (a “salary sacrifice), thus reducing your taxable income. While the contract for the finance is between you and the finance provider, if you change jobs, you take your novated lease and your car with you.
At the end of the term of the novated lease you have the option to purchase the car for a set residual or you can sell or trade. If you find you make a profit from selling the car, then it’s yours to keep!
Unsecured personal loan
Unsecured personal loans are mainly used for things like cars and debt consolidation, but can also be used for holidays and furniture.
Unsecured personal or car loans don’t need security from you, but since it’s a higher-risk loan type for your lender the interest rate may be a bit higher than a secured one.