Hire Purchase: What is it and Which are the benefits

Hopefully you are trying to budget and save each week, spending less than you earn and exercising new found financial responsibility in these economically volatile times. However, sometimes it just seems downright impossible to save for everything we want and need, like a car for example. Saving up the entire purchase price of a new car which suits your business, family or personal needs means a lot more years spent waiting for the bus in the rain.

However, there is an alternative to a high interest rate, unsecured personal loan when you want to get into a new car, and that is using a hire purchase contract.

What is Hire Purchase?

A hire purchase agreement is a type of lease, where you can take possession of a car by hiring it over the repayment term and when you make your final payment of the term, the title of the car is transferred to you. As a result, you are not the owner of the car until you have made all payments on the repayment schedule, however, you can still claim the depreciation of the car and the interest on the loan repayments as tax deductions if you are using the car for work.

The hire purchase agreement has a balloon amount included in the contract, which is the amount you will have to pay to the finance provider at the end of the hire purchase agreement term. With a balloon payment to make at the end, your monthly repayments are lower because you are not making repayments on the full purchase price, but instead on the purchase price less the balloon amount as your finance provider will get back that amount at the end.

Having a balloon in the hire purchase contract does mean you need to have some way to come up with that payment at the end of the term, and balloon payments are usually covered when you sell the car at the end of the term to upgrade to the next model. That is why it is important you choose a balloon amount which is less than what the car will be worth at the end of the term. At the same time, you don’t have to choose a hire purchase agreement with a balloon amount.

A hire purchase is ideally suited to people in business who can claim the expenses of the hire purchase agreement on tax. To be able to claim your vehicle as a business vehicle it needs to be used for work more than 50% of the time.

Benefits of a Hire Purchase

If it sounds like you would be suited to using a hire purchase agreement to get yourself into your next new car sooner, consider the other benefits available to you:

• Your choice of term. You can choose a hire purchase term from 12 months up to 60 months.

• Fixed low interest rates. The interest rate on your hire purchase can be fixed for the entire term which means your repayments will stay the same and can be easily budgeted for. You’ll also qualify for lower interest rates because the lease is secured against the car which remains the legal property of the finance company until the end of the lease, therefore providing better security than a standard personal car loan.

• No GST. There is now GST charged on the monthly hire purchase repayments, but if your business is registered for GST you can still claim the GST which is included in the purchase price of the vehicle.

• Guaranteed funding. With a business overdraft you can be required to repay the amount you’ve borrowed on demand of the bank. However, with a hire purchase you are guaranteed that a hire purchase agreement can’t be withdrawn for the term of the agreement.

• Finance the entire cost. With a hire purchase agreement you can obtain finance for the entire cost of the vehicle including any extras or accessories you choose. While a deposit may be required on the hire purchase, you can also usually use other business assets to raise this amount.

Tax Advantages of a Hire Purchase Agreement

If you are a sole trader and your business uses the accrual method of accounting, you can claim the GST in the vehicle purchase price and over the hire purchase agreement as a lump sum when you lodge your next BAS. If you are a sole trader who uses the cash accounting method you can claim the GST evenly over the term of the hire purchase agreement. The balloon repayment amount is never subject to GST.

Even if you are not registered for GST, the company providing your hire purchase lease can claim capital allowances and pass on the benefits to you in the form of a reduced rental cost.

Alban Smith is a recognised personal finance writer with 3 years experience writing for financial blogs. When he is not contributing, Alban writes guides and articles on how to compare car loans

The Options for Spouses for Expatriates - By Marc Castro

Because of the increased economic interaction between countries and nations, many individuals of one country choose to work in another country. With this choice, the individual’s family is uprooted from their home and would start living their life for the next year or so in a country alien and foreign to them.

The move is just the first step for an expatriate’s family. Once they are in the foreign land, adjusting to the weather, conditions and other living issues are also matters that they all need to accept. For the spouses, it is the boredom of not being productive as the days pass by in their new homeland.

On the contrary, an expat’s spouse can have many options to make their days fulfilling and productive even when living in a far away land. Here are some suggestions that this can be achieved to make the stay in the foreign land better for all.

Being Employed. This can be done even before the expat spouse moves to the country of assignment with their spouse. Sending out resumes to known companies or recruitment agencies can help get the ball rolling in finding a job in the new country of residence. Once they reach the country, interviews can be done and an expat spouse can be employed in no time at all.
Working from Home. This is another option for expat spouses. Here, the individual can be employed online and make their home as their office for work to be done on the Internet. What is important though is having a computer and a dependable internet connection to be able to work online from home.
Joining a Charity. Many think this is absurd but joining a charity or activity can help channel restless energy and meet other people in a foreign land. As a foreigner, your presence would be very important as you can then solicit friends and relatives back home for support that the local charity so badly needs.
Engaging a Hobby. Pick up a hobby that you have been meaning to do but did not have the time back home. This can be as simple as cross stitching or as complex as modern dance, finding a way to pass the time while enjoying yourself is important to wile away the time far away from home.
Managing the Household. Since you are an expat, your living conditions would be better off compared to the average local family. So managing your household is important to make your new residence truly a home safe and comfortable for your family. If you have children, then participating in their activities is also one way to make your bonds stronger and better while living in a foreign land.

As can be seen, there are many ways for an expat spouse can be productive even on a dependent visa of an expat. Being employed, either formally or from home, undertaking a charity, taking up a hobby or managing your household are some ways that an expat spouse spend their days in a foreign and exotic location. Soon enough, after being engrossed, you would have been able to pass the time while on location and enrich yourself in the process.

For a more comprehensive discussion on the travails of an expat family, do visit us at Women Suffer Stress When They Move Abroad, Study Shows please visit the author’s site The Expat Forum

Bad Credit Debt Consolidation Loan

The importance of debt consolidation loans can be properly appreciated by the most annoying people with bad credit history. Fiscal consolidation loans designed for people with poor credit score is a method which can protect against falling debt situation even more. Debt consolidation loans for people with bad credit have become a wonderful solution for those who were in need of money advice that really works.

Debt Consolidation Loans for people with bad credit are available for people to solve their financial problems. People can live a safe financial, just take out a loan to pay off many other loans. This is done to obtain a lower interest rate or a guaranteed interest rate. Some people take the help of the financing plan as debt consolidation loans for people with bad credit for the benefits of a loan. This means that you do not have many debts to pay each month, but only a specific one and is easy to clean.

Debt consolidation loans for people with bad credit are a solution for those people who have bad credit history. People who have a bad credit history can be compared to a situation in your financial history, due to a number of unsecured loans, which at one time were not paid. People were unable to pay their debts, and I did not get the loan, they had to take the help of some kind of solution. Until you receive any help, do not pay their debts, so your credit crashed. Debt Consolidation Loans for people with bad credit should be considered by borrowers with poor credit history. Borrower can get an amount up to a range of £ 1000 - £ 25,000 with a repayment term of 6 to 10 months. If you're thinking of applying for a debt consolidation loan for people with bad credit need not have property or valuable assets that can cover the loan.

If the borrower defaults on the loan amount, the borrower is no risk of losing the property but the lender is for legal reasons for paying the lender back and forth is not. When applying for debt consolidation loans for people with bad credit, the borrower asks the basic requirements such as proof of residency and proof of employment. Like a payday loan, debt consolidation loans for people with bad credit became very structured and strictly monitored by the safety and welfare of clients looking for a loan. However, help provide short term relief of the tax burden.

Stephenie Meyer is a financial advisor to loans for 90 days. To learn more about debt consolidation for people with bad credit consolidation loans for people on benefits, pay day loans for people with bad credit.