FAQ

Jade offers a number of financing facilities for business vehicles – CHP, Leasing and Chattel Mortgage. The decision as to which one to select will depend on the accounting method used by your business, your approach to the balance sheet and financial objectives.

The treatment of GST differs for Leasing compared with CHP and Chattel Mortgage. With CHP the income tax benefit is realised at the end of the year with depreciation while with Leasing, the repayments are tax deductible.

Your accountant is usually the best person to consult on these matters as they have an in-depth knowledge of your business structure. It is not the role of Jade to advise on those types of decisions. Our objective is to source you the cheapest CHP deal that suits your requirements

No. Jade Car Loans arranges Commercial Hire Purchase vehicle finance at a fixed interest rate. The interest rate is negotiated individually for each customer. We source the cheapest rate that suits your requirements from across our large lender panel.

The rate is fixed at that amount for the entire term of the CHP agreement. The fixed rate then determines the fixed repayments to provide certainty in planning cash flow. The fixed interest rate applies to the repayments and to any balloon amount that you have chosen to include in your loan.

As a fixed rate, the interest payable will not vary with fluctuations in official interest rates as determined by the RBA.

The full amount of the repayments is not tax deductible, only the interest portion of the repayment is deductible. The borrower realises a tax benefit or deduction, at the end of the financial year through the depreciation allowance. The allowed amount of depreciation is deducted from pre-tax income and reduces the tax obligation.

The car is depreciated as per ATO rulings as a certain percentage each year over the depreciable term of the asset. That term may be spread over a longer period than the actual CHP loan term. Cash or accrual GST claims can vary on how the GST method is claimed against the motor vehicle.

Jade recommends you discuss with your taxation professional or accountant when deciding on the best method for your business.

No. When hiring a car, you enter an agreement for the use of a vehicle owned by someone else for a short term period. You use the vehicle, pay the hire fee and return the vehicle at the end of the day/week/month.

Commercial Hire Purchase is a form of loan which works towards the borrower owning the automobile. The borrower enters into a hire agreement with the lender. The borrower makes hire payments in accordance with the loan agreement and when all payments including any balloon are finalised, the borrower assumes ownership of the goods.

CHP is a versatile form of finance which can be used for the purchase of a wide range of business vehicles and equipment.