Hire Purchase

Allows you to spread the cost of the asset over a fixed term, helping cash flow and future forecasting, giving your eventual ownership.

VAT is paid in full at the outset of an Agreement, but can be reclaimed in the next accounting quarter.

Monthly payments are then made Net of VAT

At the end of the Agreement ownership then passes to the client.

Benefits of Hire Purchase:

  • Fixed Monthy Costs
  • Enabling you to claim Capital Allowance against the Asset
  • Interest can be offset again profit for taxation
  • Eventual Ownership
  • Appears on Balance Sheet

Finance Lease

Finance lease transfers the risks and rewards of the vehicle ownership to you, much as though you had purchased the vehicle. Finance lease is an 'on balance sheet' option.

During the period of the lease, you have full use of the vehicle but you never take ownership of it.

The lease contract ends with a final payment equivalent to the residual value of the vehicle. This is normally managed through the sale of the vehicle.

In the Finance Lease arrangement you do not take ownership of the vehicle, which must be sold to a third party at the end of the agreement.

Benefits of Finance Lease:

  • Fixed Monthly Costs
  • VAT - Efficient for most organisations
  • Additional Services can be Included
  • Low Initial Outlay
  • Provides an Alternative Credit Line for Funding
  • Single Monthly Invoice
  • Appears on Lessee's Balance Sheet.