How it works
Summary of Benefits
- Ownership of vehicle
- Vehicle is retained as an asset at end of contract
- Balloon payment is projected market value of vehicle
- Flexible contract term
Lease Purchase is an agreement where ownership of the car is transferred to the customer at end of the contract, subject to all terms and conditions being met. Monthly instalments are calculated taking into consideration the cost of the car, initial rental amount, length of contract, and the final balloon payment.
Lease Purchase is well suited for companies who would like to retain the car at the end of the contract as a company asset.
Customers can show the vehicle as a balance sheet item they can then write down the value against taxable profits and claim capital allowances.
Lease purchase provides for a balloon payment that is normally equivalent to the projected market cost of the car at end of the contract.
The VAT cannot be recovered on purchase price of the car