Own Most Comfortable Drives with Lease Purchase

Lease Purchase helps you to get behind those expensive wheels at lower monthly payments, and actually own the vehicle at the end of the agreed term.

Best suited for companies aiming eventual ownership of the vehicle, a lease purchase contract requires you to pay a fixed monthly amount over an agreed period after making a low initial deposit. The monthly amount to be paid in lease purchase contracts depends upon the cost of the vehicle, the initial deposit amount, the length of the contract i.e. 24, 36, 48 months, the total mileage covered with the contact period and the anticipated future re-sale value of the vehicle at the end of the contract.

After the customer/lessee pays an amount equivalent to the estimated re-sale value of the vehicle (known as balloon payment) at the end of the contract period, the ownership of the vehicle is transferred to him.

Providing flexible option of fixed or variable rates, lease purchase contracts allows the customers to show the vehicle as a balance sheet item and write down the value against taxable profits. The customer can also claim capital allowances.

Structure of Lease Purchase

Structured on lines of a personal contract purchase, lease purchase requires the customer to settle the Residual Value (RV) at the end of the span in order to acquire outright ownership. With a large balloon payment deferred to the end of the lease purchase contract, the RV drives down the fixed monthly payment enabling you to afford costlier vehicles. As opposed to personal contract purchase, the lease purchase company does not offer any guarantee to take the vehicle back once the period of contract is over. The onus of settling the balloon payment (RV) rests completely with the customer/lessee either by of additional finance, cash or other settlements. The settlement can be made at any point of time during the period of the lease purchase contract .

Higher initial deposit, judicious adjustment of residual value and annual mileage, and a longer contract period can considerably bring your monthly payment down, thereby extending your reach further to more expensive vehicles.

Benefits of Lease Purchase

• You gain ownership of the vehicle at lower finance rates.
• You can reclaim the VAT if the vehicle is used for business purposes
• You have freedom from mileage contract
• You can choose to make smaller front end deposit
• The residual value can easily be re-financed