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Hire Purchase

Hire Purchase (HP) is a type of asset finance where a business rents a vehicle or equipment from the lender while making fixed repayments, and takes ownership only after the final payment is made. It’s a popular alternative to Chattel Mortgage for businesses that prefer to pay off an asset over time before legally owning it.

Why It Matters

Hire Purchase provides businesses with predictable repayments, access to work assets without upfront capital, and flexible terms. It’s commonly used across Vehicle Finance, Equipment Finance, and Low Doc Asset Finance for tradies, truckies, medical clinics, cafés, and logistics operators.

How It Works

  • The lender purchases the vehicle or equipment.
  • Your business hires the asset during the loan term.
  • You make fixed monthly repayments.
  • Ownership is transferred to your business after the final payment.

For fast approvals, see Fast-Track Asset Finance for ABN Holders.

Common Use Cases

  • Financing utes, vans, trucks, and work vehicles
  • Purchasing construction tools and machinery
  • Financing medical or café equipment
  • Businesses wanting ownership but without upfront capital
  • SMEs preferring a structured path to eventual ownership

Related Switchboard Resources

For official tax guidance on ownership and depreciation, visit ato.gov.au.

Do I own the asset during a Hire Purchase?
No — you only own the vehicle or equipment once the final repayment is made.
Is Hire Purchase Low Doc friendly?
Yes — many lenders offer Low Doc Hire Purchase options for ABN holders.
How is Hire Purchase different from Leasing?
With leasing, you return or upgrade the asset at the end. With Hire Purchase, you own it after the last payment. See Lease vs Buy.