What is Lease Purchase?

Lease Purchase is a finance solution that allows businesses to drive MORE vehicle for their money.

Like other finance agreements you choose the number of fixed monthly repayments (From 2 to 5 Years) and decide upon a deposit amount (VAT as a Minimum Deposit on Commercial Vehicles).  You have the choice to put down a larger initial payment to suit your circumstances.

Unlike other finance agreements, a Lease Purchase takes an agreed proportion of the vehicles value and defers it to the end of the agreement.  This is called a ‘Balloon Payment’.  This is the key to lease Purchases flexibility.

You pay your deposit, make your monthly repayments and at the end of the agreement you have two options. 

  • You can pay the balloon and take full ownership of the vehicle.
  • Alternatively, you can sell or part exchange the vehicle, using the equity difference between the vehicles market value and balloon payment as a deposit towards your next vehicle. (Please be mindful that there are many factors that can effect the vehicles market value – Such as: condition and mileage and service history – The liability of a shortfall between the market/sale value and the ‘Balloon Payment’ this would be your responsibility.)

For Business customers, Lease Purchase is classed as a purchase agreement.  This means that the vehicle will show as an asset and can have its value written down along with other plant and machinery, and interest costs may be allowed as a business expense.

Lease Purchase is quick, flexible and easy to arrange.

Benefits of Lease Purchase:

  • Minimum Deposit of the VAT on the purchase cost of the vehicle - Additional deposits can be paid to reduce the monthly payments further
  • Fixed Monthly Payments – Great for forecasting cash flow for your business
  • Agreement Periods from 24 months (2 Years) up to 60 months (5 Years)
  • No need for you or your business to be VAT Registered, however if your business is VAT       registered you can claim up to 100% of the VAT
  • A manageable monthly payment with the option to take ownership of the vehicle at the end of the term (By making the final payment)

Concerns of Lease Purchase:

  • Running Costs:  The running costs for the vehicle are your responsibility, Please take this into consideration when looking at Lease Purchase: Maintenance, Servicing and ‘Wear & Tear’ of the vehicle is your responsibility for the duration of the agreement.

Vehicle finance for businesses is a complex area and recommending the correct funding solution will depend on many factors including:

  •        Business Status
  •        Cash Flow
  •        Other Borrowings
  •        Vehicle Usage
  •        Suitability and Affordability

To ensure you get the very best advice, you should seek professional guidance from your accountant or a Business Finance Specialist.

Any agreement for vehicle funding will be completed without advice and only based on your explicit instructions.

New Vehicle Solutions Limited is authorised and regulated by the Financial Conduct Authority. Financial Conduct Authority Register Number: 685872

Company Registration Number: 8572112 – VAT Number: 166595858 Registered Office: Suite D Chapel Barns Merthyr Mawr Bridgend CF320LS

New Vehicle Solutions Limited are a Credit Broker and not Lender

New Vehicle Solutions Limited does not and will not charge any fees for providing any Consumer Credit services. 

New Vehicle Solutions Limited can introduce you to a number of finance providers, we may receive a remuneration if you enter into an agreement with them. 

Finance Agreements that are distance contracts may be subject to the right to cancel within 14 days.

Last Updated: 28/08/2015

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All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.

Finance provider documentation fees may also apply

Alternative agreement types terms, mileages and deposit quotations are available on request.

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