A more flexible option for companies
This type of lease is right for your company if you would like the option of owning the car or van at the end of the lease or if you are unable to take advantage of the VAT benefits that go with Contract Hire. You lease it for a set period of time, and have the option to buy it outright or hand it back at the end.
This type of lease is very similar to Contract Hire, but the major difference is that your company has the option to buy the vehicle at the end of the term for an amount which is guaranteed at the start of the agreement. This final payment would mean that your company becomes the legal owner of the vehicle, or alternatively the vehicle can be returned to the leasing company with nothing more to pay except any charges for excess mileage or wear and tear.
Monthly payments are fixed at the start of the lease term, and stay the same regardless of changes in interest rates or the used car market. The leasing company owns the vehicle (and therefore carries the associated risks) until it is returned or a final payment to buy it outright is made. Payments are determined from the purchase price of the vehicle, duration of lease, anticipated contract mileage and final “buy” payment.
Contract Purchase offers your company the operational, managerial and administrative benefits of contract hire, together with the tax-efficiency benefits of ownership, such as the ability to claim capital allowances. Contract Purchase is ideal for companies that cannot fully reclaim VAT.
Road tax is included for the duration of the lease. Fixed cost maintenance, breakdown recovery and a host of other services are also available through the maintenance option.
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