Lakeland Fleet Management

Business Car Hire Purchase: Is It Suitable For My Business?

In this article the benefits and costs of car hire purchase are explained. 

Hire Purchase is normally the first port of call and the most popular method for people who are looking to acquire a new vehicle. If you’re looking to take full ownership of a business vehicle, then this is likely the perfect solution. As the world wrestles with environmental concerns, businesses may find electric car hire purchase deals good for cash flow and green credentials.

Upon completion of the contract, the title of hire purchase cars passes to the lessee, who then becomes the owner. Responsibiility for depreciation as well as disposal of a motor vehicle under hire purchase, at the end of the contract, is the owner's.

Car hire purchase plans are also more affordable than simply buying the car outright, as you can agree to pay in instalments agreed between you and the lender. However, you cannot attempt to sell or dispose of the vehicle without the lender’s permission before finishing all the payments.

Businesses buying a car on hire purchase will often follow this route when they intend to keep the vehicle for a long period of time or when they need to make specialist conversions. Hire purchase car finance is a mix between a loan and a lease. You agree with the dealer to pay a deposit of anywhere between 10% and 50% before using the monthly instalments to pay off the rest.

At Leaseyournewcar.co.uk, we can find the best hire purchase car deals for your particular circumstances. In essence, the lender buys the vehicle and gives you permission to use it while you make payments. Once all the payments have been made, the car belongs to you.

Hire Purchase Cars may not be suitable for you in certain circumstances. For example:

There is no option to return the vehicle, because by entering into a Hire Purchase deal you have already agreed to buy the car via monthly instalments. It is effectively a hire purchase car loan arrangement.

Benefits of Business Car Hire Purchase Deals:

Vehicle hire purchase does have some important advantages. The vehicle is registered in the company name. Hire purchase cars appear on the company's balance sheet. Hire purchase car finance gives the stability of fixed monthly payments which are not subject to VAT. o mileage restriction

Taking care of the vehicle:

You must ensure the vehicle is comprehensively insured at all times It is a condition of the manufacturer’s warranty that the vehicle is serviced and maintained in accordance with the manufacturer’s requirements. They recommended that you use the services of a main franchised dealer Failure to make payments in full and on time may result in the contract being terminated and the vehicle repossesed. Only enter in to an agreement if you are comfortable with the financial commitment and terms.