Dealer finance
If you require new car finance when buying your vehicle from a dealer, you may consider dealer finance to be a convenient and simple solution to the problem. Just be aware that this convenience can cost you.
Dealer finance generally has a higher interest rate that the more competitive products financial institutions offer for new car finance. It can also come with extra terms and conditions, such as a hefty fee for paying out the loan early.
There are many other options available to you so take the time to shop around before signing anything when looking for new car finance.
Commercial Hire Purchase
A Commercial Hire Purchase (CHP) is suitable for companies, partnerships and sole traders who account for GST on an Accruals basis, and individuals using the vehicle for business purposes.
Under a Commercial Hire Purchase (CHP) arrangement the financier agrees to purchase the car on behalf of the customer, and then hire it back to them over a set period of time.
The customer has the use of the vehicle for the term of the contract but is not the owner of the vehicle.
At the end of the contract term when the total price of the vehicle (minus any residual) and the interest charges have been paid in full, the customer takes ownership of the car.
Novated Lease
A Novated Lease will suit any employee who wants to include a motor vehicle as part of their salary package, so long as their employer offers salary packaging as an option for employees.
A Novated Lease is a three way agreement between an employer, employee and finance company whereby the employee enters into a Car Lease (Finance Lease) with the financier and the employer agrees to take on the employee’s obligations under the lease.
Under this arrangement, the employer pays the monthly lease rentals on behalf of the employee, and provides the vehicle for the employee to use as part of their salary packaging arrangement.
If employment ceases for any reason, or the lease agreement is finalised, the Novation ceases and the obligations assumed by the employer revert back to the employee. Read the rest of this entry »