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Business Contract Purchase explained
Business Contract purchase is a type of finance agreement used mainly for the acquisition of vehicles. It differs from business contract leasing because at the end of the agreement you can opt to buy or return the vehicle. It offers flexible terms and fixed monthly payments and it could be the right choice for your business. So how does it work?
What is business contract purchase?
Business contract purchase is a finance agreement for businesses that would like flexibility to decide whether to keep or return vehicles at the end of an agreement. A business contract purchase agreement is typically used by companies who wish to use high value vehicles for business purposes and would like the option of choosing to own the vehicle at the end of the contract.
How does a business contract purchase work?
You choose a new vehicle(s) and pay a deposit up front. You then continue to pay Excel-A-Rate a fixed amount each month. At the end of the agreement you have an option to buy the vehicle outright at a pre-determined price. The finance element of the monthly payments is not subject to VAT which is clearly beneficial to organisations that are unable to recover VAT.
What are the benefits of business contract purchase?
* Fixed monthly payments - help you to budget accurately;
* Flexible terms - a choice of agreement terms and mileage allowances;
* Maintenance options - additional servicing depending on your agreement;
* Fixed final value - a fixed purchase final cost when your contract ends; and
* Full ownership - option to purchase and own at the end of the contract.
Why choose a business contract purchase deal?
This type of agreement can work particularly well for businesses which need to regularly update their fleets, without the risk of the vehicles depreciating significantly in value. The option of owning the vehicle at the end of the contract for a single fixed payment could be an attractive one depending on your needs at that time. Alternatively you might prefer to re-finance a new vehicle.
Contact us today for a no obligation consultation about your business finance options.