Hire Purchase
Hire Purchase is available to private individuals or Sole
Traders, Partnerships and Ltd Companies. This is the more
conventional way to buy your vehicle outright. You can however have
a hire purchase agreement with or without a ‘balloon’ payment (you
can decide on this figure up to a maximum figure set by the finance
company, however this not a guaranteed future value of the vehicle
and has to be paid in full).
The initial payment is usually equivalent to 10%/20% deposit and
monthly payments are usually higher than other methods of finance
due to no guaranteed future value. You can have this up to a maximum
of 60 months without a balloon payment.
At the end of the contract the vehicle is yours, if the agreement
has a ‘balloon’ payment this has to be paid first.
Key Points to Remember:-
- 1. The vehicle is registered to you and you have to
maintain the vehicle including renewal of the road fund licence.
- 2. For companies this is an asset which shows on your
balance sheet and you have to write down the vehicle.
- 3. You have to maintain the vehicle and the vehicle is
subject to depreciation.
- 4. Easy to early terminate. You can just request a
settlement figure (the calculation varies from funder to funder).
Once paid the vehicle is yours.
- 5. If you wish to change your vehicle you will have to
dispose of the vehicle in the usual ways (part exchange, sell
privately, etc.).
More Finance Options information:
Contract Hire
Finance Lease
Lease Purchase
Personal Contract Purchase / Contract Purchase
Personal Contract Hire
Hire Purchase
Outright Purchase