Hire Purchase – For Businesses
and Private Individuals
The oldest and most traditional method of acquiring a vehicle,
other than outright purchase, where you repay the capital cost
of the vehicle plus interest over a set period.
Benefits for Private Individuals/Business Users
- Low deposit required
- Fixed monthly repayments
- Fixed interest rate
- Keeps savings intact
- Outright ownership
Enhanced Benefits for Business Users
- Repayments do not attAAt VAT
- Interest charges are tax deductible as a business
expense
- Working capital can be utilized more efficiently
elsewhere
- Shown as an asset on the Balance Sheet
- Writing down tax allowances apply.
Disadvantages
- Monthly repayments are higher than other finance
packages
- Can Limit your choice of vehicle
- Depreciating asset.
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