Car Finance Glossary - Car Finance Explained
A Car Loan is a personal finance product where the financier lends the customer funds for the purchase of a vehicle, and secures the loan against that vehicle.
A chattel mortgage is a business finance product where the customer takes ownership of the motor vehicle at the time of purchase.
Commercial Hire Purchase
Commercial Hire Purchase (CHP) is also known as a Corporate Hire Purchase, Hire Purchase or Offer To Hire, and is often abbreviated as CHP or HP.
A finance lease or car lease is also known as an auto lease, vehicle lease or asset lease.
A Novated Lease will suit any employee who wants to include a motor vehicle as part of their salary package, so long as their employer offers salary packaging as an option for employees.
An operating lease enables you to lease a motor vehicle without you taking the risks associated with owning the motor vehicle or having to outlay any capital to purchase the asset. Ownership of the asset is retained by the finance provider and you are provided with full use of the vehicle in return for a fixed monthly rental matched to a term and distance that suits your needs. At the end of the operating lease term, the vehicle is simply returned in a good condition and the your finance obligation ends.
A balloon loan is a type of loan that does not fully amortize Amortization is an accounting technique used to periodically lower the book value of a loan over a set period of time. over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan.
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