Contract Purchase
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About Contract Purchase
Contract Purchase is mostly suitable
for businesses where reclaiming VAT is not required.
It is made up of fixed monthly payments over a fixed
term at a fixed rate, and for an agreed mileage. As in
a
Finance Lease the user
may share in any benefits of the disposal of the vehicle,
but unlike it, will not bear the risk of any shortfall..
At the end of the contract the user has the option of
buying the vehicle with a final balloon payment which
is predetermined as a guaranteed future value at the
outset, or of returning the vehicle. Contracts can include
maintenance and Graduated Vehicle Excise Duty (Road Tax).
The vehicle is shown on the balance sheet and capital
allowances can be claimed. (Please refer to the section
on
Lease Purchase for
a full explanation of how this works)
Personal Contract Purchase
The same as Contract Purchase but where VAT, accounting
and taxation considerations are excluded.
Follow the links below to see explanations
of different vehicle contracts:
- Suitable for most businesses, almost half of
the UK fleet market uses this option....
- Personal Contract Hire is popular
with individuals and employers who want to substitute
a cash allowance for the traditional benefit of a company
car....
Contract Purchase - Contract Purchase is mostly suitable
for businesses where reclaiming VAT is not required
- If you wish to keep vehicles
as a business asset....
- This type of agreement
is available to private individuals....
- An alternative to Contract Hire where the
hirer has the option of paying back the capital cost
of the vehicle over a longer period....
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