Hire purchase, also sometimes known as lease purchase , is a popular choice that gives you ultimate ownership of the asset through payment of regular instalments.
Payments can be structured to meet your cashflow needs. For example payments can be reduced by including a final lump sum (sometimes known as the 'balloon' payment.)
This reflects the assumed value of the asset at the end of the agreement and business can claim the available capital allowances and offset the interest against trading profit.
Finance Lease
Finance leasing allows you to rent the asset rather than buying it.
While you can never own the asset yourself, you will normally be allowed to benefit from the majority of the sales proceeds at the end of the term.
The rentals can be offset against your profits
PCP Finance
Personal Contract Purchase plan provides the benefits of driving a higher spec vehicle for a lower monthly payment.
Unlike the traditional purchase plan , this is achieved by deferring a percentage of the total cost of the vehicle to the end of the contract.
This percentage is known as the Minimum Guaranteed Future Value and is the key difference between PCP and traditional forms of financing.
