What are the benefits of hire purchase?

The benefits of hire purchase include Fixed Budgeting, Fixed Monthly Payments, No mileage restrictions, No mileage restrictions.

What are the benefits of lease purchase?

The benefits of lease purchase include Lower payments through the option of a balloon (deferred final payment), Option to purchase the vehicle at the end of the agreement, Flexible arrangement - terms can be amended, Any equity in the vehicle can be used as a contribution towards a new vehicle.

What are the benefits of lease purchase?

The benefits of personal contract purchase include Fixed monthly payments, Low deposit, Fixed interest rates, Option to purchase at the end of the agreement, Option to hand the vehicle back at the end of the agreement with no additional charges* (subject to vehicle condition & mileage), Available on new & used vehicles. (used must not exceed 60 months at the end of the term).

Asset Finance Products Explained

Q: What is Hire Purchase?

Hire purchase is a type of asset finance where the purchaser will pay regular instalments throughout the agreed time. After all the payments have been made, the purchaser legally owns the asset. Hire purchase for assets is like when an individual might buy a car, normally this involves paying a deposit and all the VAT upfront.

Q: What is Lease Purchase?

An asset lease purchase, or finance lease, is when a customer rents an asset during the majority of that items useful life. The customer renting the asset will never own it but takes on most responsibilities, such as maintenance. Lease purchases consist of regular monthly payments, which add up to the full cost of the asset plus interest. At the end of the agreement, the customer has three options: Continue to use the asset in a secondary lease period (often with cheaper payments), sell the asset and keep a share of income, return the asset. The finance option feels like a hire purchase; however, they are different on the balance sheet. Deciding between them is usually down to financing as with lease purchase you can spread the VAT cost over several payments.

Q: What is Personal Contract Purchase (PCP)?

Personal contract purchase is used by a private individual when they are looking to buy a new vehicle. A PCP financial deal guarantees a future price on the asset-based on estimates from CAP.

Different finance products offer different routes to using or owning an asset. This guide explains the main features of Hire Purchase, Lease Purchase and Personal Contract Purchase so you can understand the questions to consider before applying.

The options available will depend on the asset, its intended use, lender criteria and your individual circumstances.

For a quotation, or should the product you are looking for not be available below, please get in touch with one of our experienced team who will be happy to assist you.

Call our team on 01423 608666 or enquire today.

What is Hire Purchase?

Hire Purchase is a form of asset finance that spreads the cost over an agreed term. You will normally pay an initial deposit followed by regular repayments. Once all payments and any option-to-purchase fee have been made, ownership of the asset transfers to you. The deposit and VAT treatment will depend on the asset and agreement.

The benefits of hire purchase include:

Fixed Budgeting
Fixed Monthly Payment
No mileage restrictions
Full ownership at the end of the agreement

Not sure if hire purchase is right for you? Get in touch with one of our team to find out more.

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What is Lease Purchase?

Lease Purchase is a form of asset finance for businesses that intend to own the asset at the end of the agreement. Regular repayments are made over an agreed term, with part of the cost often deferred to a larger final balloon payment. This can reduce the monthly repayments.

At the end of the agreement, you may be able to:

Pay the balloon payment and take ownership.
Refinance the final payment, subject to approval.
Sell or part-exchange the asset to settle the balance.

Lease Purchase is similar to Hire Purchase, but the deferred final payment can provide a different repayment structure. The balloon payment is not optional, and you remain responsible for settling the outstanding balance.

The benefits of lease purchase include:

Lower payments through the option of a balloon (deferred final payment)
Option to purchase the vehicle at the end of the agreement
Flexible arrangement - terms can be amended
Any equity in the vehicle can be used as a contribution towards a new vehicle.

Interested in knowing more about lease purchase? Message us today.

Get in touch

What is Personal Contract Purchase (PCP)?

A Personal Contract Purchase agreement includes an optional final payment based partly on the vehicle’s anticipated value at the end of the term. At that point, the customer may be able to pay the final amount and keep the vehicle, return it subject to the agreement’s mileage and condition terms, or use any available equity towards another vehicle.

The benefits of personal contract purchase include:

Fixed monthly payments
Low deposit
Fixed interest rates
Option to purchase at the end of the agreement
Option to hand the vehicle back at the end of the agreement with no additional charges* (subject to vehicle condition & mileage)
Available on new & used vehicles. (used must not exceed 60 months at the end of the term)

Get in touch with us today to find out more about personal contract purchase

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Why Businesses Choose Ethos

Ethos is an independently owned Asset Finance company which operates across the UK.

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Asset Finance Products Explained

What is Hire Purchase?

What is Lease Purchase?

What is Personal Contract Purchase (PCP)?

Why Businesses Choose Ethos

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