Lease Purchase is good for businesses that want to own their vehicles without paying large amounts of cash up-front. Monthly rentals can also be managed by selecting an initial deposit and balloon payment to suit your circumstances.
With Lease Purchase vehicles appear on your balance sheet as a fixed asset and depreciate over the period of the agreement. This means that costs can be offset against the profits of your business. This also means that your business takes the risk that the value of the vehicle may be less at the end of the agreement than the balloon payment.
Lease Purchase is often used for higher value vehicles that are likely to hold their value well over time.
Things to consider
Flexible monthly rentals and balloon payments
Own the vehicle at the end of the contract period
On balance sheet funding can be tax efficient
Less usage restrictions than with Contract Hire
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