Business Car Lease Purchase Deals - Frequently Asked Questions

FAQ’s for Lease Purchase

What is Lease Purchase?

Lease Purchase is a hire purchase agreement provided by our Leasing Company regulated by the Consumer Credit Act 1974.

This product is ideal for a Non-VAT registered organisations who want eventual ownership of the vehicle. This is a dedicated funding product that does not include maintenance or any other value added services.

Who owns the vehicle?

This product is an 'Ownership' style contract where the organisation is making payments with the intension to purchase the vehicle at the end of the contract.

The Leasing Company owns the asset until all rentals including the final balloon rental if applicable has been paid in full.

Is Lease Purchase subject to VAT?

Tax Allowances

Lease Purchase arrangements are treated for tax purposes as a purchase by the customer when the vehicle is brought into use. As a result the writing down allowance is claimed by the customer depending on the CO2 of the vehicle

Monthly payments are not subject to VAT.

If the agreement is for an LCV (commercial vehicle), then the full amount for the VAT on the purchase must be paid in advance by the organisation. As this is a 'purchase' agreement the organisation would then be able to reclaim this on their next VAT return (subject to VAT status)

What is the initial outlay to you?

As the Leasing Company is underwriting an organisation or business user, the usual profile is to pay three rentals in advance.

What Payment Options do you have with Lease Purchase?

There are 3 different Payment/Rental Profiles which support this product:

  • Terminal Pause
    If you take enter into a 36 month contract, you will normally pay 3 rentals in advance, followed by 33 monthly rentals followed by 2 months where no rentals are due.
  • Spread rentals
    This payment profile results in a lower rental than 'terminal pause' but technically the same length of contracts. If you take a 36 month contract, you will pay 3 rentals in advance followed by 35 monthly rentals with the contract ending in month 36.
  • Enhanced deposit
    This is used when a customer has a part exchange and wishes to use this vehicle towards a deposit. Should a customer take a 36 month contract, they will pay 1 rental (should be no less than an equivalent 3 rentals) in advance followed by 35 monthly rentals and the contract ends on month 36.

Can I have a Service & Maintenance on this contract?

No this contract does not come with a service and maintenance option, the customer is fully responsible for adhering to the manufacture servicing schedules. Failure to do so could invalid the Manufacturer’s warranty on the vehicle.

Does the Leasing Company insure the Contract Hire Vehicle?

No. It is your responsibility to insure the vehicle. Please see the Terms & Conditions of the contract.

How often should a service be carried out on a Lease Purchase vehicle?

Services should be carried out as per the guidelines in the manufacturer's handbook.

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Car leasing credit broker (not a lender) Leasing4u is a trading name of Blueroc Ltd - Registered in England number 05139277 Registered office Unit 4 Mallard Court, Mallard Way, Crewe, CW1 6ZQ; Data Protection Z8611873; Authorised and regulated by the Financial Conduct Authority, Firm Ref No 660124. All information contained in this website is current at the time of publication and whilst the greatest care has been taken over its compilation, leasing4u cannot be held responsible for any errors or omissions. Business Contract Purchase prices displayed do not include the price for RFL which is included in the contract, this additional amount will be shown on your confirmed quotation as a services cost. Please note it is illegal to enter into a finance arrangement on behalf of another person. Carleasing4u and leasing4u are registered trademarks and we may also be know as Car Lease 4u, Carlease4u, carleasingforyou, carlease 4 you. All photographic images are for illustration purposes only and may not depict the relevant model. We are a Leasing Broker Member of the BVRLA and our membership number is 1431. E & OE.