Also known as corporate car lease, personal car finance, private car lease or car finance l uk. Ideally for non-VAT registered companies that want eventual ownership of the vehicle or for VAT registered companies who wish to claim the VAT in full with their first payment on a commercial vehicle. Technically impossible (since lease means rental not purchase) but so called in the vehicle supply industry. Lease purchase is effectively a hire purchase contract that includes a single larger final payment at the end. This is called the balloon payment and reduces the monthly repayment during the life of the contract. Repayments do not carry VAT and the capital cost is written down for tax purposes in the same way as for hire purchase.
For anyone thinking about contract hiring a car, it's very important to understand what contract hire is — and what it is not — and how it works and if you have any questions no matter how small just give us a call.