Finance

Contract Purchase

This method of financing was introduced to alleviate the burden on companies who were unable to reclaim the VAT on their monthly payments and to overcome the cost of corporation tax implications for cars costing more than £12,000.

The difference between Contract Purchase and Contract Hire is that you can buy the vehicle at the end of the contract period by paying a 'balloon payment'

The key benefits to your company

• Fleet financing can be on or off the balance sheet
• There is no VAT on the finance element of the monthly payment although VAT is charged on any additional services
• Fixed Interest means easier cash flow budgeting
• You can claim Capital Allowances