Hire & Lease Purchasing

These are finance options that allow the lessee to purchase a vehicle at the end of an agreement period, assuming that all outstanding (or previous) payments have been made. The finance period can be tailored individually to allow the cost of the vehicle to be spread over its useful working lifetime.

The general rule is that a monthly payment is calculated using the cost of the vehicle, the amount of deposit paid, the contract period agreed and the final residual value.

Lease Purchase is associated as being a Hire Purchase Contract that includes a final fee or Balloon Payment. This option aims to reduce the actual monthly repayment fee involved in the contracted agreement period.

Benefits of Hire Purchase

• Fixed monthly payment terms make budgeting and administration simple
• There is no VAT payable on the instalments
• Hire purchase charges can be offset against taxable profits
• Goods are treated as assets on the balance sheet from the start of the agreement
• Capital allowances can be claimed and Ownership of the asset is secured at the end of the agreement by the payment of a nominal purchase fee

Benefits of Lease Purchase

• Lower initial expenditure: increasing the amount of company resources
• Taxation allowances: Vehicles acquired through Lease Purchase attract the same taxation allowances as purchased vehicles.
• Interest is also allowable against tax
• Ownership: At the end of the Lease Purchase term, vehicles are the property of the lessee to use or dispose of as preferred
• There is no VAT payable on the instalments

If you would like any more information on the services we provide, please contact us to discuss your requirements.