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.
HOW CONTRACT PURCHASE WORKS
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.
IS CONTRACT PURCHASE RIGHT FOR MY BUSINESS?
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