Finance Options - Hire Purchase/Lease Purchase
 After
paying an initial deposit, the balance of the purchase price
is repaid by monthly payments. The agreement can be between
one and four years and when all the payments have been made
you become the owner of the vehicle.
These options are appropriate if it is important to you to
retain your vehicles as company assets.
Straightforward payment structures are available. There are
a number of flexible options which enable to increase the
initial deposit and or make a final "balloon payment",
which enables you to adjust the level of your monthly costs.
You can also base the repayments on fixed or variable interest
rates.
The vehicle is classified as a balance sheet asset which
allows you to write down the value against your taxable profits.
The initial outlay is smaller than outright purchase and
the spread cost helps you to manage cash flows.
Your vehicles are treated as a balance sheet asset, enabling
you to claim capital allowances.
The interest on repayments can usually be offset against
taxable profit.
Remember the following consideration:
- You cannot recover the VAT on the purchase price of the
vehicles.
- All risks of ownership, maintenance, administration and
disposal remain with you.
- You may need to allow for the additional cost of providing
internal or third party fleet administration.
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