Lease purchase is suitable for companies not registered for VAT that want eventual ownership of the vehicle.

Lease purchase is a funding agreement where the company acquires ownership when all payments, including the purchase payment have been made. Part of the capital cost of the vehicle payment may be deferred into a balloon payment at the end of the agreement, which equates to the anticipated market value of the vehicle at the end of the agreed leasing period.

The benefits of lease purchase include:

  • fixed monthly cost,
  • ownership at the end of the lease,
  • flexible contract,
  • balloon payment,
  • low initial outlay,
  • business capital not tied up in a depreciating asset,
  • finance not subject to VAT,
  • interest reclaimable against tax,
  • writing down allowance,
  • road fund license included for the full contract length.