Lease Purchase (LP)
No monthly payments, just a single, up-front payment followed by a choice of three final options at the end of the agreement term.
How it Works
- We purchase the vehicle you choose, allowing us to claim back the VAT. This means that your payments are calculated on a VAT exclusive price.
- You choose the deposit and term of the agreement between 12 and 60 months. Your rentals are spread over this period. At the end of the agreement, the end of the primary period, the vehicle can be sold to a nominated third party with the proceeds, less a nominal fee, being paid back to you as a rebate of rentals.
- This rebate will attract VAT, so if you have reclaimed VAT during the agreement, HM Revenue and Customs will need to know about VAT on your rebate. Alternatively you may choose to keep the vehicle on a secondary period rental known as a 'peppercorn' rental. Alternatively, you may choose to reduce your regular rentals by deferring a 'balloon' payment to the end of the agreement. Agreement terms for this option are between 12 and 48 months.
- At the end of your agreement, the primary period, you pay the balloon; the vehicle can then be sold to a nominated third party with the proceeds, less a nominal fee, being paid back to you as a rebate of rentals. Again this rebate will attract VAT, so if you have reclaimed VAT during the agreement, HM Revenue and Customs will need to know about VAT on your rebate. Alternatively you may choose to keep the vehicle on a secondary period rental, known as a 'peppercorn' rental.
Customer Benefits
- Rentals are lower as they are calculated on the VAT exclusive price of the vehicle.
- VAT registered businesses can reclaim a portion of the VAT paid on rentals.
- Rentals are allowable against tax.
- The vehicle can be shown as an asset on your balance sheet.
- Low initial outlay and regular rentals for easy fixed budgeting.
