Effectively a Hire Purchase with a leasing payment pattern. The customer will own the vehicle after payment of an option to purchase fee. This option can be of particular value to companies not registered for VAT.
Compass purchase the vehicle of your choice, having agreed on a contract term, annual mileage, monthly rental and a mutually acceptable option to purchase price.
At the end of the contract you pay the option to purchase price and then own the vehicle. Alternatively Compass can sell the vehicle, and the sale proceeds are offset against the option to purchase price. Should the sale proceeds exceed the option to purchase price, you receive the surplus cash benefit.
Option to purchase price is commonly known as a balloon payment.
Service options included in Lease Purchase:
- Free sourcing and delivery of your vehicles.
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 Compass Vehicle Maintenance package.
- Paying for fuel, oil and insurance.
- Paying for the Road Fund Licence.
- Should the sale proceeds be less than the residual value, then you will be liable for any shortfall.
- Minimum initial expenditure, typically three months in advance.
- Fixed monthly payments for accurate budgeting.
- VAT on monthly payments is not applicable.
- You can purchase the vehicle at the end of the contract.
- Flexibility to structure the option to purchase price or residual value.
- Routine servicing and maintenance costs can be covered.
- Capital allowances claimable against tax.
Depreciation is your responsibility.
There are limited tax advantages.