LEASE PURCHASE

Lease purchase is a flexible finance option similar to Hire purchase, however allows for an optional deferred sum (‘balloon’) to be paid at the end of the agreement. This deferred sum can reduce your monthly payment or reduce your contract length.

HOW LEASE PURCHASE WORKS

  1. You pay an initial deposit followed by a fixed number of monthly payments over an agreed contract period.
  2. Monthly payments can be reduced by making a ‘balloon’ payment at the end of the agreement.
  3. The amount of the balloon payment will be agreed on at the beginning of the contract.

BENEFITS OF LEASE PURCHASE FOR YOUR BUSINESS

Fixed monthly payments for ease of budgeting.

Monthly payments are not subject to VAT.

Option to include deferred sum (also known as the ‘final balloon’) allows flexibility whilst keeping monthly payment low.

There are no mileage restrictions, as you retain ownership of the vehicle.

Taxation benefit from writing down allowance.

LCV’s acquired on Lease Purchase should be eligible for the Annual Investment Allowance.

LCV’s acquired on Lease Purchase are required to pay VAT up front as a lump sum.

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