Lease Purchase
Lease Purchase is available to Sole Traders, Partnerships and Ltd
Companies. It is a fixed budgeted motoring plan. You can however
have a lease 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, term and mileage can all be tailored to suit
your needs. An initial payment is made (usually equivalent to 3
monthly payments instead of your usual 10%/20% deposit) followed by
a monthly payment up to the agreed term.
At the end of the contract you have two options: - 1. Keep the
vehicle and pay the ‘balloon’ payment. 2. You can dispose of the
vehicle but the ’balloon’ payment still has to be paid.
Key Points to Remember:-
- 1. Road Fund Licence is not included for the duration of the contract agreement.
- 2. The contract is agreed from the start to suit your requirements therefore making budget planning easier.
- 3. This is an asset which shows on your balance sheet and you have to write down the vehicle.
- 4. On the sale of the vehicle you have to take into consideration the VAT (if a commercial), equity/negative equity if purchase with a
‘balloon’ payment and disposing of the vehicle.
- 5. You cannot have a maintenance agreement with lease purchase so you will have to maintain the vehicle,
More Finance Options information:
Contract Hire
Finance Lease
Lease Purchase
Personal Contract Purchase / Contract Purchase
Personal Contract Hire
Hire Purchase
Outright Purchase