FINANCE

how lease purchase works

Lease Purchase and Finance Lease

Hire Purchase with added flexibility to suit your needs

Lease Purchase enables you to pay a deposit to suit your budget, then repay the remaining balance over an agreed period. After the contract is finished, you take ownership of the vehicle. Monthly payments can be reduced by deferring a proportion of the balance by making a 'balloon' payment at the end of the agreement.

Benefits Include:

- Fixed monthly rentals for ease of budgeting

- Monthly payments are not subject to VAT

- No mileage restrictions

- Option to include a deferred sum / final 'balloon' payment to keep monthly payments low

- Taxation benefit from writing down allowance

- LCV's acquired on Lease Purchase are eligible for the Annual Investment Allowance

- LCV's acquired on Lease Purchase are required to pay VAT upfront as a lump sum

Here's how it works:

1) You pay an initial deposit followed by a fixed number of monthly payments over an agreed contract period.

2) Monthly payments can be reduced by making a 'balloon' payment at the end of the agreement.

3) At the end of the agreement, subject to payment of a nominal Option to Purchase fee, you take outright ownership of the car.

And it's that easy.

Finance lease

Flexible and VAT efficient

Finance Lease combines many of the benefits of Contract Hire

and Lease Purchase. Many companies choose Finance Lease to avoid a large capital outlay and defer a lump sum ‘balloon' payment to lower the monthly payments. A Finance Lease is a VAT-efficient method of financing a vehicle that is usually accessed by VAT-registered companies.

Up to 50% of the VAT payments can be reclaimed on cars and 100% on LCVs. VAT is payable on the rentals, so an LCV on a Finance Lease may require a smaller initial deposit, thus improving cash flow. Finance Lease is ideal for companies who want to take advantage of the end of contract flexibility.

Benefits Include:

- Fixed monthly rentals for ease of budgeting

- Lump sum or number of rentals as advance payment

- Option to extend agreement into a ‘secondary' period for a nominal annual fee (peppercorn rental)

- Option to include a deferred sum/final ‘balloon' payment to keep monthly costs low

- Same tax relief as Contract Hire

- 50% VAT reclaimable on cars

- 100% VAT reclaimable on LCVs

Here's how it works:

1) You pay an initial deposit followed by a fixed number of monthly rental payments over an agreed contract period.

2) At the end of the term you can choose a further ‘secondary' lease of hire or dispose of the vehicle on our behalf and keep 100% of the proceeds (paid as a rebate of rentals).

How's that for flexibility?

Source: www.nissan.co.uk

Category: Credit

Similar articles: