What is the definition of a Commercial Hire Purchase, and how do they work?
A Commercial Hire Purchase (CHP) is a commercial car finance product. Under a Commercial Hire Purchase a finance company purchases a car or vehicle on behalf of the customer, and then gives the customer use and posession of the car (“hires”) in return for regular payments. Once the final payment has been made and any residual (balloon) value paid, the customer takes posession of the vehicle (“purchase”). Alternatively, the customer can choose to “trade in” the vehicle, or re-finance the residual value.Please note that this information is of a general nature only. You should consult an accountant to obtain information specific to your situation.
