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Contract Purchase

Simply a combination of Lease Purchase and the service options of Contract Hire. This option has been designed specifically for customers who are unable to register for VAT or who are partially VAT exempt and who require a fixed monthly rental with the option to include a maintenance package. Contract Purchase is popular with companies purchasing executive type cars covering a low mileage Compass purchase the vehicle of your choice, having agreed on the contract term, annual mileage, service options, guaranteed option to purchase price and the monthly rental. On termination of the contract, you can choose to either return the vehicle with nothing further to pay or to purchase it at the agreed option to purchase price written into the contract.

Services options included in Contract Purchase:
  • Free sourcing and delivery of your vehicles.
  • Road Fund Licence for the duration of the contract.
  • Free collection of your vehicle at the end of the contract.
Additional services which can be included:
  • All routine servicing, mechanical repairs, batteries, exhausts and tyre replacement
  • Replacement vehicle provided in the event of an accident or mechanical breakdown.
  • Full membership of a motoring programme including Home Start, Road Side Assistance, Relay, Relay Plus and European Cover.
  • Motor insurance, individual or fleet cover available.
  • GAP insurance up to a maximum of £5,000.
Your only responsibilities:
  • Choosing the vehicle.
  • Choosing the service options.
  • Paying for fuel, oil and insurance.
The Benefits:
  • Fixed monthly rental for accurate budgeting and cash flow.
  • Minimum initial expenditure, typically three months in advance.
  • No capital tied up in a depreciating asset.
  • If you don’t purchase the vehicle at the end of your contract, any depreciation the vehicle may have suffered is NOT your responsibility.
  • Routine servicing and maintenance costs can be covered.
  • No purchasing or disposal hassles, providing constant mobility.
  • VAT payable on service options only.
  • Flexibility to retain the vehicle at the end of the contract.
  • Vehicle shows as a balance sheet asset.
  • Capital allowances claimable against tax.
Disadvantages:
  • Cannot be shown ‘off balance sheet’.

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