Contract Purchase Car Finance Option!

How about purchasing the very car you have been driving for months and that too without having to put up wad of money.

Contract Purchase bundles the benefits of contract hire with the option for you to purchase the vehicle at the end of the contract period. Largely used by companies as a way of acquiring high net worth vehicles, contract purchase provides the customer option to make a final balloon payment and own the vehicle outright or hand the vehicle back to the contract purchase company. At the end of the contract if the customer thinks that the value of the vehicle is lower than the required balloon payment, he has the freedom to keep the vehicle or hand it back to the contract purchase Company with no more liabilities.

Contract purchase is designed for those companies who purchase the vehicles and retain them as assets once the term of contract is over. The customer is required to pay a fixed monthly payment with an initial deposit amount equivalent to a few months rental. The vehicles are shown as an asset on the company’s book and the payments do not attract VAT. A maintenance agreement and other value added services could also be offered to the customers.

Since the customer may or may not retain the vehicle at the end of the agreed term, the risks associated with the resale value are not transferred to him. The contract purchase company purchase the vehicle at the stipulated value after the period of contract is over.

Contract purchase enables you to release the much needed capital, thereby providing you with surplus finances to invest in other resources. Taking away the large investment, contract purchase makes sure that your cash flow is not disrupted.

Benefits of Contract Purchase

• Contract purchase allows you to retain or return the vehicle once the contract is over.
• You pay a fixed monthly rental which is lower than that of a car loan
• You are not required to make a large up-front payment
• Resale value risks rest with the contract purchase company, if you do not wish to make a final balloon payment and purchase the vehicle at the end of the term.
• You can avail of other features offered in the maintenance and service packages

Leveraging the benefits of contract purchase, you can easily finance more expensive cars on your fleet and actually own them once the stipulated span is over, if you find them suitable.