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Hire Purchase:
Hire
Purchase is a finance plan that provides immediate use of plant and
equipment over an agreed term, whereby the borrower obtains outright
ownership of the equipment at term end.
Chattel Mortgages:
A
Chattel Mortgage contract is a loan secured by a mortgage over the
equipment financed. A Chattel Mortgage contract is similar to a Hire
Purchase except that the borrowor has legal title to the equipment at
commencement, rather than on final payment.
Finance Leases:
Finance
Lease Plans have fixed lease payments over an agreed period with a
predetermined residual value at term end. When the final payment is
made and the agreed period expired the following options are available
to the lessee:
- Make an offer for the asset to the lessor for an amount no less than the residual value.
- Re-lease the residual value for a further period (conditions apply).
- The asset is returned to the lessor who in turn sells the
asset at market value to recover the residual value and selling
expenses. Any shortfall incurred is the liability of the lessee.
Novated Leases:
A
Novated Lease is an arrangement whereby an employee enters into a
standard finance lease and then transfers (Deed of Novation) their
vehicle lease obligations to the employer.
The Deed of Novation is entered into between the employees, the employer and the financier. |
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