Finance Options

 

Contract Hire

Contract Purchase

Lease Purchase / Hire Purchase

Finance Lease

Outright Purchase

Who owns the vehicle?

Finance Company

Finance company until LAST PAYMENT

Finance company until LAST PAYMENT

Finance company until LAST PAYMENT

The Customer

Who carries the residual value risk?

Finance Company

Finance Company

The Customer

The Customer

The Customer

Who carries the ongoing maintenance risk?

Finance company IF maintenance contract taken

Finance company IF maintenance contract taken

The Customer

The Customer

The Customer

Is the vehicle on or off the balance sheet?

OFF balance sheet

ON balance sheet

ON balance sheet

ON balance sheet

ON balance sheet

How much cash is required up-front?

Typically 6-7% of purchase price

Typically 6-7% of purchase price

Typically 15% of purchase price

Typically 15% of purchase price

100 % of purchase price

Who arranges delivery / collection?

Finance Company

Finance Company

The Customer

The Customer

The Customer

Does the customer own the vehicle after the term?

NO

Yes if final payment is made

YES

NO

YES

Can the monthly payments be offset in full against tax?

All up to £12k. Over £12k a portion disallowed. 100% maintenance offset

No rental restriction over £12k. Capital allowances allowed.

Finance element offset. Capital allowances allowed.

All monthly rentals offset against tax. Over £12k portion only

Yes

Assuming some private use, What % of VAT can be reclaimed?

50% of VAT of rentals. 100% VAT on maintenance

None

None

50% of Vat on rental payments. 100% of VAT on maintenance

Capital allowances can be offset/Tax but up to 25% of £3k P/A Whichever is more