What is business lease purchase?
Lease purchase contracts is available to business customers. It is an agreement designed to offer dedicated vehicle funding if your company eventually wishes to buy the vehicle, but doesn’t want to spend the money up front.
Lease purchase is purely a finance package and does not include maintenance or other added-value services, such as those offered with a contract purchase agreement.
Suitable For
As part of a lease purchase agreement, you will pay an initial deposit and then a series of monthly payments until the end of the agreed contract length. The initial deposit and monthly payments are worked out using the retail value of the brand new vehicle, the length of contract (two or four years, for example), and the estimated residual value of the vehicle at the end of the contract.
Business lease purchase is available to all financially eligible companies, sole traders and partnerships.
Main Features
- Pure finance package – no maintenance packages or other services are included
- The vehicle will belong to your company once the lease purchase agreement has begun
- The slower a vehicle’s value depreciates, the better deal you will be able to get, as it is you who takes on the residual value
- The car or van is paid for via an initial deposit, low monthly payments, and a final balloon payment
- The vehicle must be purchased at the end of the agreement
- The vehicle is registered in the name of your company
- Vehicle will be retained as a company asset
Balance Sheet
- On-Balance sheet funding
VAT Treatment
- Monthly payments are not subject to VAT
- No Vat can be reclaimed
End Of Contract
- A final agreed “balloon” rental is payable to take ownership of the vehicle
- The final balance has to be paid with no options of returning the vehicle
ecofleet Features
- Buying power ensures consistently keen pricing
- Vehicles delivered FOC
Is it right for you?
There are scenarios where Business Lease Purchase is the right funding option to choose. We’ll analyse your fleet profile and will help you identify the best solution for your business. Backed by pro-active customer service for you and your drivers, ecofleet can design and deliver a comprehensive company car policy that is effective and matches your strategic financial objectives.
All information provided on this site is for guidance only. We recommend that you seek professional advice from your accountant and tax office before making any decisions. eco fleet uk Ltd accepts no legal liability for the information given as it has been provided for illustration only. It is your responsibility to check the validity of this with the relevant authorities.
