Trucks Finance Hire Purchase Explained

Hire Purchase

Enjoy the balance sheet benefits of economic ownership of the vehicle. You can also choose between a fixed or variable interest rate, whichever suits your business. When all payments have been made, you own the vehicle. Full VAT is payable with the initial deposit payment.

Main Characteristics of Hire Purchase:

  • The vehicle is treated as "on balance sheet"
  • The Finance House has legal title to the vehicle until all instalments and final option fee have been paid, after which the customer takes final ownership
  • Choice of fixed or variable interest rate
  • Fixed monthly payments throughout can include seasonal payment schedules or even a balloon payment at the end of the contract, to lower the monthly costs

Main Benefits of Hire Purchase:

  • The mutually agreed deposit will include the full VAT on the cost of the vehicle which is reclaimable by you
  • You can claim writing down capital allowances, reducing your tax bill
  • You can offset interest element of monthly payment against taxable profit
  • You enjoy 100% of the benefits of the asset value and it is on the balance sheet
  • Known cash flow with repayments not subject to VAT
  • Product can be tailored to your operating environment by structuring the payments to your specific requirements