What Is It?

Under a Contract Purchase agreement, you have the facility to purchase vehicles over a predetermined period of time and at fixed monthly costs, without taking the depreciation risks normally associated with ownership.

It's the solution for companies who want to own their vehicles, but want to avoid the risk of depreciating assets.

Key features and benefits:

• Contract purchase has similar benefits to contract hire regarding fixed payments and flexible terms 
• Maintenance and added value services can be included in the contract purchase agreements 
• We will guarantee the resale value of the vehicle at the end of the contract purchase agreement for a known, fixed amount 
• Ownership passes to the customer at the end of the contract purchase agreement when all payments have been made

How Does It Work?

The monthly payment is based on the cost of the vehicle, anticipated depreciation and mileage, as well as any service and maintenance options you wish to include.

At the end of the contract, you can retain ownership by making a final balloon payment. Alternatively the vehicle can be returned to us for resale, with no further payments due.

How Is It Accounted For?

The vehicle appears as a balance sheet asset for the duration of the contract, meaning that you can claim capital allowances against the vehicle purchase price.  Currently this represents 40% year 1 and 25% for subsequent years.  As the finance agreement is a purchase type agreement, no VAT is chargeable on the payments.

Our Approach

If you are fully or partially exempt from VAT then Contract Purchase could be right for you.

We consolidate a conditional sale or HP agreement, a repurchase agreement and a Maintenance agreement into one simple agreement that gives you many of the benefits of contract hire without the VAT or corporation tax implications.