Purchase or 'Ownership Options'

Lease / Hire Purchase or Contract Purchase

All finance packages available under Purchase Options, ownership of the motor car can eventually pass to the hirer upon the payment of all the monies due under that agreement and will normally have an option to purchase fee, generally incorporated in the final payment. The monthly payment under such agreement are not subject to VAT, though VAT will be payable under other fees such as Administration charges, Document Fees etc. It is always advisable to ask for details of any fees as with companies they can be considerable and whilst they will be detailed in any quote and included in any Annual Percentage Rate (APR) calculation, they may be emphasised in verbal quotations or those outside the Consumer Credit Act 1974 (CCA).

For accounting purposes the motor cars purchased using this method of funding, will be shown on the company's balance sheet as an asset and writing down allowance will be claimed. The writing down allowance or depreciation will be shown under expenditure in the company's profit and loss account as will any interest payable and any other charges or fees. The Finance Fees Agreement will be included on the balance sheet along with other liabilities of the company.

Such agreements available to the business are, Hire Purchase, Lease Purchase, and Contract Purchase. Further details of each of these finance details are to follow. There are also available to the private buyer numerous purchase options which will be explained later.