Contract Purchase incorporates all the management and administration
benefits of Contract Hire with the tax advantages of ownership.
Contract Purchase is best suited to companies that are either unable
to claim back VAT or require more expensive vehicles.
The asset appears on the company Balance Sheet and Writing Down
Allowances can be offset against taxable profits, subject to IR
legislation.
The customer achieves ownership of the vehicle with the payment
of the "balloon" figure (disclosed from the outset of the contract)
or alternatively hands the vehicle back with no charge (subject
to the terms of the contract).
The benefits of Contract Purchase are:
Minimal initial outlay, typically 3 months repayments
Fixed cost allows accurate budgeting
Elimination of Residual Value risk
Elimination of maintenance risk (if selected)
Minimal administration
Writing Down Allowances offset against taxable profits (subject
to IR legislation).
Major fleet discounts incorporated within the repayment
