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What is lease purchase

With some many options to purchase, lease or hire a commercial vehicle it can be difficult enough to understand the differences, let alone choose which one is best for you and your business.

What is Lease Purchase?

The first of these options we will explore is lease purchase. Like many of these options, it has it for’s and against.

In a nutshell, lease purchase starts with a deposit, has an agreed monthly payment with a final balloon payment (the balloon payment is based on the estimated residual value at the end of the term, of which mileage is included in this estimation), following which you own the vehicle.

It’s important to note if purchasing through a limited company only the interest payments are an allowable company expense, and your company is also able to claim Capital Allowances to gain relief for the cost of the vehicle , which in turn reduce the company’s taxable profit.

Lease purchase is the least popular for many businesses, the majority of which choose finance lease (We’ll explain that in another post shortly).

Should you have any further questions or would like a quote please call 01656 674620.

What is finance purchase



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