Hire purchase is a way to finance a car that you will be using for business purposes. The lender buys the vehicle, and you hire it for a specific period.
Hire purchase is different from other forms of vehicle financing, such as a car loan, because the financier will buy the car you want to use. The financier will then hire out the car to you, often through regular instalments.
Business owners may prefer to hire purchase cars as they get to use the vehicle without taking out a large loan to purchase it. The title of the vehicle is transferred to you after you have completed the payments.
Companies, partnerships, sole traders and individuals can opt for hire purchase cars in Australia, but it is mandatory that the vehicle must be used for business or to generate income.