Business Contract Purchase

Contract Purchase is ideal for non- or part-VAT registered businesses.

Contract Purchase is ideal for non- or part-VAT registered businesses wishing to run high-value, low annual mileage vehicles without the risk of depreciating assets.


  • Low initial deposit (typically one to three months in advance)
  • Fixed monthly rental for accurate budgeting and cash flow forecasts
  • Choice of rental period to suit your needs, from 24 to 60 months
  • Guaranteed residual value/balloon payment fixed at start of contract
  • Facility to exit agreement anytime with agreed, fixed charge
  • No depreciation risks or disposal concerns
  • Staff never without vehicles, hence no purchasing or disposal hassles
  • VAT payable on service options only
  • Vehicle shows as a non-depreciating balance sheet asset
  • Capital allowances claimable against taxable profits, as is any bank loan interest
  • Ownership passes to customer at agreement’s end when all payments made.


Contract Purchase is a finance agreement for VAT registered companies whereby the company chooses its vehicles, pays an initial deposit and then continues to pay for the cars or vans in fixed monthly installments. These payments are not subject to VAT.  Typically, the contract lasts for, e.g. 24 or 48 months.

Using our fleet purchasing power, WestMid source the vehicle(s) of your choice and deliver free of charge. You will previously have agreed a contract term, annual mileage, service options, guaranteed option-to-purchase price, and the monthly rental.

On termination of the contract you choose either to return the vehicle with no further commitment, or to pay the agreed option-to-purchase price – known as a balloon payment. This is in addition to the deposit and monthly payments. Or you can simply hand back the vehicle and, so long as it’s in good condition and hasn’t exceeded the agreed mileage, there will be no more to pay.

If the vehicle’s market worth is greater than the depreciation amount agreed, you are paid the difference and can use this as a deposit for another lease.


  • It is an option for VAT-registered companies only.
  • Fleet-management help and advice is offered, free of charge, if needed.
  • Preferred option if running prestige vehicles is important to your business/executives.
  • Fully comprehensive insurance is required for all vehicles at all times.
  • Vehicles are owned by your business and therefore shown on balance sheet.

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