Truck Loans Australia :: Articles

7 things you need to know about a Hire Purchase loan

7 things you need to know about a Hire Purchase loan

7 things you need to know about a Hire Purchase loan
There are seven things you should know before you ever think of getting a Hire Purchase loan. Knowing these things will give you control and power in the loan process. Power and control will will save you money
Most common type of vehicle and goods financing is through a Hire Purchase Loan product. This is for those who do not have the cash at the time or want to conserve their cash. They are able to buy the goods and pay them off over a period of a Hire Purchase Loan. The lender owns the goods until complete payment of the Hire Purchase loan are made &then the title is passed on to the person/s who paid off the loan.

Questions for a financial advisor.

Always make a point to ask your taxation or financial advisor on the effects of tax and cash flow management.
Do the  loan repayments and laon residual balloon payments include goods and services components?
Need Money for a Bike?
Image for Need Money for a Bike?We offer fast, free, easy access to the best Bike Loan rates and options in the Australian market. Simply use our 3-minute Bike Loan enquiry form to see if you qualify … and you'll get instant access to our national specialist Bike Loan broker network for free advice and assistance through the approval process. No charge, no obligation!
For asset depreciation and interest deductibility are the assets effectively owned by me even though the title does not pass until the loan maturity?  
On a cash accounting basis for goods and services tax must I claim the goods and services tax component proportionally across the loan term?  
If I am on a cash accounting basis for goods and services tax are likely to be unsuitable for hire purchase loan? 
Should the goods and services tax I am going to pay be financed through a loan or should I pay cash for it and keep it out of the loan?

Loan term

Generally loans in hire purchase are for 12 to 60months.It is very important that you take into account the life of the goods you are buying compared to the life of the hire purchase loan.
How long will they last? Take a computer for instance.It is unlikely they will last longer than three years. So why would you take out a hire purchase loan for 5 years. Fit the term of the loan around the use by date of the product.
If you are given a 5 year guarantee on the product then you can go for the 5 years Hire Purchase Loan.

Supplier and dealer invoice the lender directly.

It is best that you shop around for the hire purchase and avoid using the retail stores package. 
Contact a Finance Broker for an introduction to the finance package you require.Once you have selected the finance provider,inform the retailer and they will bill the lender directly. That is all you have to do with the retailer.

Deposits and trade-ins can be used.

It is important to see the effect of a deposit or a trade-in on the monthly payments and the term of the Hire Purchase.
When you are buying ensure that you get a trade- in, look at what you can sell it for directly before you go to the seller.

Loan can be fully amortised or balloon payment factored in.

Generally you can either pay the loan out in equal payments.   This is called amortisation.
Alternatively you can make equal payment for all payments except the last one. The last one can be up the 50% of the total loan. This is called a balloon payment.
Be very careful and ensure that you have a good understanding of balloon payments. It is critical that you are can estimate the potential value of the goods you are buying in three or four years time at the time of the purchase.

Other payments structures such as seasonal payments are available.

Discuss your cash flows and have on hand the documents to prove what you saying. In these cases you will be surprised what a lender will be able to do to fit in with your household or business.
The golden rule: ASK!!
While it may state the obvious, many people get into financial difficulties by having multiple Hire Purchase Loan agreements running simultaneously. They are in effect loan financing the house or the business.
While credit cards are the primary destroyers today loans via hire purchase and personal loans are up there. You must be very aware of this and take responsibility to act conservatively when dealing with loans.
So what should you do? Do not take on more Hire Purchase Loans than you can safely repay!

Published: Sunday, 1st Aug 2021
Author: 150


Truck Loans Articles

How to Choose the Right Lender for Your Commercial Truck Loan How to Choose the Right Lender for Your Commercial Truck Loan
For many Australian businesses, purchasing a commercial vehicle is a significant investment that often requires financial assistance. Understanding the intricacies of truck financing is crucial, as the right loan can affect your company's bottom line and operational efficiency. With a plethora of lenders offering myriad loan products, choosing the most advantageous deal can be daunting. - read more
Understanding Credit Scores and Their Impact on Your Commercial Vehicle Loan Terms Understanding Credit Scores and Their Impact on Your Commercial Vehicle Loan Terms
Finding the right financing for a commercial vehicle in Australia can be a critical step for businesses and individuals alike. Whether it's for a single van or an entire fleet of trucks, understanding the intricacies of commercial vehicle loans is key to securing a deal that aligns with your financial goals. One factor that stands out in determining your loan terms is the credit score—a numerical representation of your creditworthiness. - read more
The Commercial Buyers Guide to Buying a Used Truck in Australia The Commercial Buyers Guide to Buying a Used Truck in Australia
With the evolution of the logistics industry and small businesses gaining momentum in Australia, the market for used trucks has witnessed substantial growth in recent years. This surge is a testament to the pivotal role commercial vehicles play in driving the economy forward, keeping supply chains agile and businesses thriving. - read more
The Pros and Cons of Leasing vs. Buying a Truck for Your Business The Pros and Cons of Leasing vs. Buying a Truck for Your Business
Small businesses that require regular transportation of goods may find it essential to purchase a truck. However, this acquisition can become a significant investment that requires careful consideration before making a decision. The two options available are buying or leasing a truck. In this article, we will explore the pros and cons of each option to help you make an informed choice. - read more
From Small to Big: Financing Your Truck Expansion in Australia From Small to Big: Financing Your Truck Expansion in Australia
Expanding your truck fleet is a critical step in driving business growth. For many small businesses, increasing the number of commercial vehicles means accessing new markets, delivering goods more efficiently, and ultimately, boosting profitability. In the competitive Australian market, staying ahead requires not just maintaining but expanding your transport capabilities. - read more
Essential Financial Safety Nets for Aussie Truck Drivers Essential Financial Safety Nets for Aussie Truck Drivers
Welcome to the road less traveled, where the rubber meets financial prudence. Truck driving in Australia is not just about long miles but also about ensuring financial stability amidst life's crossroads. As a truck driver, taking the wheel of your financial future is crucial, and that's what we'll navigate in this article. - read more
Maximizing Your Fleet Potential: How Truck Financing Shapes Success Maximizing Your Fleet Potential: How Truck Financing Shapes Success
Trucks play a pivotal role in the Australian logistics and transport industry, serving as the lifeblood that keeps commerce flowing. The dependable rumble of engines crisscrossing the nation's highways is more than just a symbol of industry; it's a critical component of productivity and economic stability. Without these workhorses facilitating the timely movement of goods, the Australian market would face significant challenges meeting the demands of both businesses and consumers alike. - read more
How to maintain your truck to extend its lifespan in Australian conditions How to maintain your truck to extend its lifespan in Australian conditions
Maintaining your truck is essential if you want to prolong its lifespan and save money down the road. Australian conditions can put a lot of strain on your vehicle, and neglecting its maintenance can lead to costly breakdowns and repairs. - read more
From Small to Big: Financing Your Truck Expansion in Australia From Small to Big: Financing Your Truck Expansion in Australia
Expanding your truck fleet is a critical step in driving business growth. For many small businesses, increasing the number of commercial vehicles means accessing new markets, delivering goods more efficiently, and ultimately, boosting profitability. In the competitive Australian market, staying ahead requires not just maintaining but expanding your transport capabilities. - read more
5 Tips on Securing Low-Interest Rates for Your Vehicle Purchase 5 Tips on Securing Low-Interest Rates for Your Vehicle Purchase
Embarking on the journey of acquiring a commercial vehicle is a significant decision for any business. Securing a loan with a low-interest rate is not just a matter of luck; it involves meticulous planning and a thorough understanding of the lending landscape. This opening section sets the scene for our deep dive into navigating the commercial vehicle loan process with an eye toward minimizing costs and maximizing value. - read more

Finance News

Uncovering the Impact of Unsolicited Solar Sales on Consumers Uncovering the Impact of Unsolicited Solar Sales on Consumers
04 Jul 2025: Paige Estritori

In a concerning revelation, Australian retiree Christine Hirchfield shares her ordeal with an unsolicited solar installation that turned into a financial nightmare. Despite her initial enthusiasm for cheaper energy bills and a greener home, the project remains incomplete more than a year later. Consumer groups are now advocating for a nationwide prohibition on deceptive sales practices that target vulnerable consumers like Ms Hirchfield. - read more
Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge
03 Jul 2025: Paige Estritori

Australian online retail sales experienced a modest rise in May, as consumers continued to invest in fashion, games, and toys. According to the latest figures from the National Australia Bank, there was a 0.7% increase in online sales for the month, compared to a 1.1% growth in April. Over the past year, Australians have spent approximately $63 billion on online retail purchases. - read more
Pay Boosts and Policy Changes: A Closer Look at Financial Updates for Australian Workers Pay Boosts and Policy Changes: A Closer Look at Financial Updates for Australian Workers
03 Jul 2025: Paige Estritori

The starting days of the new financial year bring significant changes for Australian workers, particularly those on minimum wage. As of Tuesday, the minimum wage will rise by 3.5 per cent, increasing hourly earnings to $24.95, or $948 weekly. This adjustment also affects award wages and comes as a response to rising living costs, outpacing current inflation rates. - read more
US Dollar Faces Historic Decline Amid Trump’s Tariff Policies US Dollar Faces Historic Decline Amid Trump’s Tariff Policies
03 Jul 2025: Paige Estritori

The US dollar has experienced an unprecedented decline, marking its worst first-half performance since 1973. Concerns surrounding President Donald Trump's tariff policies have intensified, leading to a substantial drop in the value of the world's primary reserve currency. Specifically, the dollar weakened by 10.7% against a basket of major trading partners' currencies in the first six months of the year, reminiscent of Nixon's era when the dollar was untethered from gold. - read more
Auditor Deregistered After Brite Advisers Collapse Auditor Deregistered After Brite Advisers Collapse
30 Jun 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has deregistered auditor David Makowa, previously of DM Advisory Services, due to his role in the downfall of financial advice firm Brite Advisers. This decision follows Makowa's acceptance of a court-enforceable undertaking in which he agreed to surrender his auditor registration permanently, pledging never to re-apply. - read more

Start Here

Get a free truck loan eligibility assessment and compare truck finance and leasing options without accessing your credit file!!
Loan Amount:
Postcode:

Quotes are offered free & without obligation. We respect your privacy.

Knowledgebase
Portfolio:
A range of investments held by an individual or institution.