Hire Purchase (HP)
Hire Purchase (HP) is simply a hire agreement which offers a straightforward way of spreading the cost of your vehicle or company asset, with the benefit of ownership at the end of the agreement.
At the start of the agreement you simply decide on an initial deposit, typically 5% upwards of the purchasing price, the length of term of your agreement, usually between 12–84 months. Then throughout the term you pay equal monthly instalments with a fixed rate of interest until the remainder of the balance is repaid.
At the end of your agreement once you have made your final monthly repayment including a nominal Option To Purchase Fee, the title of the asset will be transferred into your name.
With Hire Purchase you also have the flexibility to defer a final lump sum balloon payment until the end of the agreement, also known as Lease Purchase Agreement.
Why choose Hire Purchase?
- Flexible deposit to conserve your personal or business cash.
- Fixed monthly payments for ease of budgeting.
- Ownership at the end of the agreement.
- No mileage restrictions.
- Fixed interest rate.
- Monthly repayments do not attract VAT.
- Tax allowances for business users.
- Option to defer a final lump sum to reduce monthly repayments (Lease Purchase).
The credit agreement is secured against the asset for the duration of the agreement. This means the creditor remains the legal owner of the asset until the final payment has been made.
For further information or to discuss how Chatsbrook can help you or your business please contact us here.