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Company A is a construction company that does work for commercial building developments. It is looking at acquiring a new vehicle as the existing mobile crane is reaching the end of its useful life.
It has been looking at a new hydraulic mobile crane with a 45 metre main boom. The purchase price of this vehicle is S$800,000 and Company A is considering acquiring it on a Hire Purchase basis over a period of 3 years.
Company A has been provided the following terms by the Leasing Company:
|Interest Rate||:||4.6% per annum effective|
|Tenure of Hire Purchase||:||3 years|
|Frequency of Repayments||:||Monthly in advance|
Based on these terms, Company A has a few options to consider.
Option 1: Put up a 10% downpayment of S$80,000 and make monthly repayments of S$21,368.07 for the mobile crane under the Hire Purchase arrangement.
Option 2: Put up a 20% downpayment of S$160,000 and make monthly repayments of S$18,993.84 for the mobile crane under the Hire Purchase arrangement.
At the end of the Hire Purchase Agreement, after making full payments, Company A will have full title to the mobile crane.
* Disclaimer: These examples are entirely fictitious and purely for illustration purposes only. The figures and interest rates are not representative and additional terms and conditions may also apply. Each financing application is also subject to a credit assessment and evaluation. ORIX Leasing Singapore Limited and its employees make no representations or warranties, whether expressed or implied, and accept no responsibility for the completeness or accuracy of the computation. Interest rates depend on the loan amount and period, and are subject to approval from ORIX Leasing Singapore Limited's management.