what is special purpose vehicle? why is it used?

Answer 1

SPV

Firms can finance themselves on- or off-balance sheet. Off-balance sheet financing involves transferring assets to "special purpose vehicles" (SPVs), following accounting and regulatory rules that circumscribe relations between the sponsoring firm and the SPVs. SPVs are carefully designed to avoid bankruptcy. If the firms bankruptcy costs are high, off-balance sheet financing can be advantageous, especially for sponsoring firms that are risky. In a repeated SPV game, firms can "commit" to subsidize or "bail out" their SPVs when the SPV would otherwise not honor its debt commitments. Investors in SPVs know that, despite legal and accounting restrictions to the contrary, SPV sponsors can bail out their SPVs if there is the need. We find evidence consistent with these predictions using data on credit card securitizations.

Hope this is what you needed... Because thats what a Special Purpose vehicle is....

Off a side note... You can Build a Vehicle for a Special purpose but all have Names for almost every one... Example Limo, Presidents Car and his cavalcade, Truck and Vans for a certain job only like a Fire Truck, City bus, There are so many....

Happy Trails...

Answer 2

This is actually not a vehicle at all.
They are basically constituted to handle a new, separate project to focus on a single dimension to make it a success.

Answer 3

special purpose could refer to a vehicle that is equipt
for people with certain physical handicaps. they are used,so,that people with certain limitations can drive.