Lease Purchase

What is Lease Purchase?

An affordable way to get your fleet up and running, with low monthly payments.

If you’re looking for an affordable way to get your fleet up and running, Lease Purchase keeps monthly payments low by deferring a large portion of the finance to the very end of the term, unlike Hire Purchase.

As you will own the vehicle at the end of the term, there are no mileage or damage stipulations making it an ideal choice for Light Commercial Vehicle (LCV) fleet operators with high wear and tear or unpredictable mileage, while the low monthly payments help with cash flow.

How it works

1
Choose your vehicle

We fund all makes and models.

2
Agree the term length

Typically between 24-48 months.

3
Monthly payments

Pay your initial rental and your monthly payment is then calculated along with the final balloon payment.

4
End of contract

Pay the balloon payment to keep the vehicle or trade it in as a contribution towards paying off the balloon payment.

Tax allowances that add up*

It pays to plan for maximum tax efficiency:

With Lease Purchase, the VAT is paid upfront within the purchase cost of the vehicle, so you don’t pay VAT on the monthly payments.

If your business is VAT registered and runs LCVs you can claim 100% of the VAT back from the outset.

Any vehicles on a Lease Purchase sit as assets on your business’s balance sheet and you can offset 100% of the interest charges against pre-tax profits.

Vehicles can also be written down in line with HMRC guidelines at 18% and 6% (CO2 emissions dependent).

Until 31 March 2026 a 100% first-year allowance is available for main rate expenditure – known as full expensing.

Main rate expenditure is qualifying expenditure on plant or machinery, including vans.

Better budgeting and increased uptime

Keeping up with servicing, replacement tyres, and repairs can bring unexpected costs, but adding a Service Maintenance and Repair (SMR) plan to your monthly fixed payments will help you budget, all while being 100% tax allowable and 100% VAT reclaimable.

All our SMR plans come with Driverline, our 24/7, 365 days a year driver support service to help increase fleet uptime. Our team are available on the phone and via our web app if you need roadside assistance, accident management or maintenance bookings, such as same-day servicing and repairs.

Here to help

With no mileage limits and low fixed monthly payments, Lease Purchase reduces end-of-term risk and can be settled early at any time. It’s a flexible path to ownership while aiding cash flow, contact our team to find out more.

*This information does not contain tax advice. Please consult a trusted tax advisor if you need advice on employee BiK.