CHP or HP: What is it?

A business car finance in which the financier buys the car on behalf of its customers is called a commercial hire purchase. The financier then rents it out to the customer on a monthly re-payment plan. The term of the contract normally ranges from 12 to 60 months.

Oftentimes, Commercial Hire Purchase may also be referred to as a Corporate Hire Purchase, Hire Purchase, Asset Purchase or Term Purchase and is commonly abbreviated as CHP or HP. Though it has many names but it is mostly known as car leasing options. Compare car loans and save on a car leasing option by looking around for a sweet deal.

How does a Commercial Hire Purchase work?

The Commercial Hire Purchase agreement is what is known as a contract between the finance provider and the customer where the financier allows the customer to gain possession and the use of the vehicle and use it as desired. The consumer will pay a monthly fixed amount to the financier.