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Finance Lease

With any lease contract the finance company takes full ownership of the asset and rents the goods to you over a predetermined period. The finance company can claim the writing down allowances and convey this benefit to you by reducing the rentals.

Complete a contact form or call 0115 9849800 to find out how our experts can help you to secure the asset finance you need.

It also worth noting that the purchase price that is being used to calculate the rental is the purchase price net of VAT. Thus, if you are looking to acquire a VAT qualifying car, if leased the rental is calculated on the net price of the car and not the gross price if funded by Hire Purchase.

Generally, with a finance lease, you will source the supplier, and having paid the documentation fee and an initial payment of a multiple of rentals, substantially all of the remaining cost of the asset is spread over the agreed primary period in accordance with the pause.

The rentals attract VAT that can be recovered subject to eligibility. As the finance company is the owner of the asset, you will not need to pay the purchase VAT at inception.

As with Hire Purchase, you can include a balloon rental to reduce the value of the primary rentals. At the end of the agreement you may have the option to enter into the secondary period. As you have generally covered the entire capital cost of the asset and hire charges (interest) in the primary period, should you wish to continue to use the asset, a secondary or peppercorn rental is charged. This rental typically approximates to 3% of the original cost and is a one off annual payment. As you are not the owner of the asset, you cannot sell the asset during the rental period. However, as you are generally covering the total cost and hire charges within the primary period, you will be entitled to a share of the sale proceeds should the leasing company allow you to sell on their behalf. Your share of the sale proceeds is usually agreed at inception and is typically 95-99%.

Complete a contact form or call 0115 9849800 to find out how our experts can help you to secure the asset finance you need.

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