Lease Purchase is an agreement which adopts the payment profile of a lease, typically 3 months repayments in advance, and incorporating a final "balloon" payment (optional and not guaranteed). Once the final payment is met along with a nominal "Option to Purchase" fee the vehicle becomes the property of the customer.
Lease Purchase is ideal for companies that either are unable to claim back VAT or prefer to take ownership of the vehicle at the end of the agreement.
The benefits of lease purchase are:
Minimal initial outlay, typically 3 months repayments.
Writing Down Allowances offset against taxable profits (subject to IR legislation).
VAT is charged on the vehicle and does not apply to the monthly repayments.
