UK car classifieds

UK car classifieds

UK new or used cars and dealerships buying/selling cars

  1. UK Information
  2. UK Car Classifieds
  3. UK car finance, car loans and credit
  4. Car Finance Glossary
  5. Lease Purchase

Lease Purchase

This finance option is similar to hire purchase offering a flexible deposit, flexible repayment periods, and a flexible percentage of the purchase price can be deferred to the end of the agreement (where it differs from a hire purchase). Because part of the price is deferred to the end, the monthly payments are lower than a hire purchase agreement. This can help the company's cashflow whilst getting the same tax and financial benefits as it would from a hire purchase agreement.

The initial deposit is normally paid as monthly payments in advance, thus making cashflow management easier.

At the end of the finance term, there are two options:

  • Pay the balloon payment (residual value) as a final lump sum to get ownership of the vehicle
  • Part exchange the vehicle and upgrade for a new one.