Contract Purchase & HP

Hire Purchase (HP)

If ownership is a priority then Hire Purchase is one of the most cost effective and commonly used methods of funding  by private individuals and businesses (including sole traders, partnerships and limited companies) to fund vehicle purchases. With hire purchase, the customer normally pays a deposit which is then deducted from the purchase price and the balance is financed and spread over a pre-determined term with interest calculated and added on top. At the end of the hire purchase agreement, the vehicle is owned outright.

  • Flexible deposits (often equivalent to the VAT on the vehicle)
  • VAT deposit reclaimable for VAT registered customers
  • Repayment period between 12 and 60 months
  • Fixed interest rates throughout the term
  • Interest payments can be offset against taxable profits
  • No mileage limits
  • Agreement can be tailored to your needs
  • Payments are VAT free
  • 100% ownership at the end of the term

Personal Contract Purchase (PCP)

Personal Contract Purchase gives you all the benefits of Hire Purchase (ie. ownership of the vehicle) with all the benefits of Contract Hire (ie. no risk). The finance company gives you a guaranteed future value (GFV) so, at the end of the agreement, you can either:-

  • Hand the vehicle back and owe nothing
  • Pay the balloon (GFV) and keep it or sell it
  • Part exchange it for a new one if the residual value is greater than the GFV

By including Optional Purchase Payment equal to the GFV, we can reduce your monthly payments.

Other features and benefits of Personal Contract Purchase include:-

  • Flexible deposits and repayment periods
  • Repayment period typically between 24 and 48 months
  • Fixed interest rates throughout the term
  • No risk of depreciation
  • No mileage limits
  • Loan is not secured
  • Road Fund Licence included for the whole term
  • Maintenance can be included

Contract or Lease Purchase

Structured similar to and with all the benefits of Personal Contract Purchase but for businesses, Contract or Lease Purchase is an on balance sheet method of car leasing where you can purchase the vehicle at the end of the agreement by making a balloon payment.

Additional features and benefits of Contract or Lease Purchase include:-

  • Deposits are typically 3 months rental + all VAT
  • Monthly payments are VAT free
  • VAT deposit reclaimable for VAT registered customers
  • Interest charges can be offset against taxable profits
  • Vehicle is an asset on the balance sheet and benefits from normal writing down allowances

 Additional Benefits

All Motorhound and Vehicle Strategies’ clients receive access to our unique vehicle and driver management software


Do you have more questions or want to talk to someone?

We are not a faceless internet company, we'd love to discuss your requirements, offer advice and answer any questions you may have regarding the purchasing your next car. We can help you get finance, arrange insurance and even manage your fleet! Call us on 01202 392141 or 07576 353636

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