Lease purchase

Lease Purchase is an ideal alternative to bank borrowing for businesses that are not VAT registered and who want eventual ownership of their cars. This is simply a funding scheme that also favours businesses that prefer minimum payments to assist with cash flow. This is because part of the capital cost is deferred until the end of the agreement and has the obvious effect of reducing the monthly payments.

In paying the balloon you complete the agreement and the car is yours to keep. If you trade the car in for another, then any allowance over and above the balloon payment is yours and can be put towards your deposit on your next car. Likewise, if the allowance is less than the balloon, then you are responsible for the shortfall.

Benefits of Lease Purchase

• Eventual ownership
• Low initial deposit
• The car can be written down in your books
• All interest paid can be off-set against tax
• No VAT on payments
• Option to take early settlement
• No restriction on mileage