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Home » New & Used Trucks for Sale » » Trucks Finance Lease Purchase Explained

Lease Purchase

Lease Purchase is a Hire Purchase agreement, offering you the option to own the vehicle at the end of the agreement. It offers fixed repayments and fixed interest payable on the purchase price less the deposit. In addition, you have the ability to defer a proportion of the vehicles cost to a final balloon payment at the end of the agreement. This will result in lower monthly payments than Hire Purchase and could therefore improve your cash flow.

Main Characteristics of Lease Purchase:

  • Simple and quick to put in place
  • You retain ownership of the vehicle
  • You are not tied to mileage restrictions
  • You have fixed repayments and fixed interest to control your costs
  • Same tax benefits as Hire Purchase (see Hire Purchase section for more details)

Main Benefits of Lease Purchase

  • Rentals are lower as they are calculated on the VAT exclusive price of the vehicle
  • VAT registered businesses can reclaim a portion of the VAT paid on rentals
  • Rentals are allowable against tax
  • The vehicle can be shown as an asset on your balance sheet
  • Low initial outlay and regular rentals for easy fixed budgeting