Contract Purchase

A simple funding solution to purchase your own specialist fleet HGV palnt specialist Funding Contract Purchase

 

Contract purchase is a fleet funding solution that allows your company to purchase vehicles over a set period of time, eliminating the large capital outlays associated outright purchase.

 

How it works

First, you choose the vehicles you want, based on your budget, and agree a mileage limit. We lease the vehicles to you for a fixed monthly fee, with a fixed payment up front, and a final balloon payment at the end of the contract. You can also take out a maintenance agreement with us for day to day repairs and servicing, which can be built into your monthly payments. The vehicles will become your property once you have paid all of your rental installments, plus your final balloon payment.

Your vehicles will appear on your balance sheet, associated with a lease creditor.  The vehicle is then depreciated down to the agreed residual value over the term of the agreement.

As the vehicles are a company asset, 18% of the vehicle’s value is allowable each year against taxable profits

If you are VAT registered you can claim back 100% of VAT on any maintenance options you take out with us. You can also claim back any VAT on the purchase price of vehicles, at the start of your agreement.

 

The benefits

  • Fixed monthly payments allow for improved cashflow and easy budgeting during the contract period
  • No need to tie up all your capital at once
  • Own your own fleet, with minimised depreciation risks
  • Low initial outlay – typically this equates to an amount equal to the VAT
  • Save time and money on administration with our full servicing & maintenance options
  • Reclaim VAT on purchase price of vehicles at the start of your agreement 
  • Reclaim VAT on maintenance and servicing options
  • At the end of your agreement, return the vehicle to us rather than pay a final balloon payment if purchase is no longer in the interests of your company

 

 

Is Contract Purchase right for you?

Decide whether contract purchase is the right funding option for your business:

It may suit you if your business is VAT registered, in which case you can recover the full amount of VAT on a vehicle's purchase price, at the start of the contract. It may also suit you if you wish to avoid tying up large amounts of capital by buying your fleet vehicles outright, or if you wish to reduce administration by outsourcing your fleet servicing & maintenance as part of acquiring new vehicles.

 

Take a look at our funding overview page for other options that may suit your business better or speak to one of our experienced fleet consultants on 01225 777 710.

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