Contract Purchase offers 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.
The monthly payment takes into consideration the cost of the car, anticipated depreciation and mileage, as well as any service and maintenance options you wish to include.
At the end of the contract, ownership can be retained by making a final balloon payment. Alternatively the vehicle can be returned for resale by the funder, with no further payments due.
The vehicle appears as a balance sheet asset for the duration of the contract, meaning that you can claim capital allowances at the rate of 25% per year on the reducing asset value of the vehicle (up to a maximum of £3000 per annum). However, unlike Contract Hire VAT is not recoverable on the monthly payments.
For vehicles over £12,000 a balancing charge or allowance is made on disposal of the vehicle, thus generating tax efficiencies by allowing for the full depreciation amount.
Contract Purchase on Directors cars may be more expensive than Contract Hire on a monthly basis however when taking into account that 50% of the VAT is payable on the rental, the written down allowance may provide better tax allowances than the Contract Hire rental allowances and there may even be a profit opportunity upon sale of the vehicle.
Alfa Romeo Car Leasing --- Audi Car Leasing --- BMW Car Leasing
Fiat Car Leasing --- Ford Car Leasing --- Honda Car Leasing
Hyundai Car Leasing --- Jaguar Car Leasing --- Kia Car Leasing
Land Rover Car Leasing --- Lexus Car Leasing --- Mazda Car Leasing
Mercedes Benz Car Leasing --- Mini Car Leasing --- Peugeot Car Leasing
Renault Car Leasing --- Saab Car Leasing ---
Seat Car Leasing
Skoda Car Leasing --- Subaru Car Leasing --- Suzuki Car Leasing
Toyota Car Leasing --- Vauxhall Car Leasing --- Volkswagen Car Leasing
Volvo Car Leasing
