Hire Purchase & Hire Purchase with Balloon payment
Hire Purchase is an ideal choice for those looking for vehicle ownership, allowing you to spread the payments for a vehicle - and once all of the payments have been made the vehicle is yours.
A Hire Purchase with a balloon payment is simply a Hire Purchase agreement that features a "balloon" which defers payment of some of the capital until the end of the agreement. The vehicle is yours when all of the payments, including the "balloon", have been made.
All you have to decide is whether you want lower monthly rates with a balloon payment at the end or simple fixed payments over an agreed term.
There are just a few other straightforward options to consider too;
- You agree an appropriate deposit plus VAT (which is reclaimable).
- You make monthly or quarterly repayments that include interest for the agreed period.
- You can choose from fixed or variable interest rates.
- You can even choose to pay in advance or in arrears.
Benefits & key features of Hire Purchase options
Entering into a Hire Purchase agreement isn't just straightforward, it also brings some great benefits for the business user;
- Interest is allowable against taxable profits.
- Writing down allowances are claimable.
- An additional line of credit.
- Vehicle is shown as an asset on the balance sheet.
- Regular payments are kept low if a balloon payment is selected.
- Repayments are not subject to VAT.