Hire Purchase

• Low Deposit - usually VAT only
• Fixed monthly repayment aids budget control and cash flow.
• Monthly repayments are VAT free
• VAT deposit reclaimable (VAT registered customers)
• 100% of interest charges can be offset against taxable profits
• Vehicle is an asset on your balance sheet and benefits from writing down allowances
  Year 1 - 50% Year 2 - 25% Year 3 - 25% etc...
• Ownership of vehicle will pass when the agreement is completed
• Ideal for those who want ownership of the vehicle

Finance Lease

• Deposits are usually the equivalent of three rentals, but can be any amount
• Flexible repayment period - up to 60 months
• VAT is paid monthly, then reclaimed quarterly (if VAT registered)
• Rentals are 100% allowable against taxable profits
• Facility can have a balloon profile, which defers a large payment to the end of the contract - thus reducing monthly rental and aiding cash flow
• Vehicle sold or part-exchanged at end of contract, hirer benefits from 95% of sale proceeds (ex. VAT)
• Ideal for non-VAT registered business users looking for low initial deposit and maximum flexibility
• No mileage restrictions

Contract Hire

• Deposit is normally 3 payments in advance
• Total budget control - fixed costs, as long as you stay within the mileage
• VAT is paid monthly, then claimed back quarterly (if VAT registered)
• Rentals are 100% allowable against taxable profits
• Dependant on contract type can include full maintenance package (services, repairs and tyres etc)
• At the end of the contract, you hand the vehicle back
• The vehicle is subjected to an inspection, where any reconditioning costs are charged to the customer - Ideal for VAT registered larger fleet operators
• Mileage restrictions apply. Excess mileage recharged