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.
