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Business contract purchase

What is business contract purchase?

Business contract purchase gives you an easy way to lease a vehicle for a set period of time with the option to buy the vehicle (at an agreed price) or return it at end of the agreement.
This can be an attractive option for VAT-registered businesses that want to own their vehicles and avoid the risk of depreciating assets. It can be particularly appealing for high-value vehicles.

How does it work?

We guarantee a residual value for the vehicle at the start of the contract. You then pay an initial deposit and make monthly payments to cover the vehicle’s remaining cost.
Agreements typically last for 36 or 48 months and longer agreements usually mean lower monthly payments.

There is the option to cancel the contract early, but you must pay all the remaining payments to do this – and you can then buy the vehicle or return it.

If your company is VAT registered, you won't have to pay VAT on the monthly finance payments, but they will apply on the service costs of any optional service or maintenance package if you choose to take it.

What happens at the end of the contract?

Give the vehicle back to us

It’s worth reading the BVRLA ‘Fair Wear & Tear Guide’ before this time, as it explains what counts as fair wear and tear.

Keep the vehicle for an extended period

If your contract is unregulated, you can keep the vehicle for an extra 12 months and continue paying your current rental amount. If you do this, you will lose the option of handing the vehicle back to us. Any rental payments you make during the informal extension will contribute towards paying the residual value on a sliding scale.

Buy the vehicle

If you want to buy the vehicle, you will need to pay the residual value agreed at the start of the contract, plus an ‘option to purchase’ fee.

Get the details

For a full description of how business contract purchase works, please see our product guide.

It might be right for you if

  • You want to pay a fixed monthly amount, with the option to include maintenance costs.
  • You are interested in a high-value vehicle.
  • You want brand new vehicles.
  • You want the option to purchase the vehicle for a fixed amount at the end of contract.

It may not be for you if

  • You do not want the option of owning the vehicle at the end of the contract.
  • You prefer to buy used vehicles.
  • You want the lowest-cost lease. Monthly payments tend to be higher with this option than contract hire agreements, while the interest rate is sometimes a little higher than you pay with hire purchase.
  • You are concerned about your credit score, as the full cost of the vehicle is shown on your credit file.

Key details to keep in mind

  1. Road tax

    Included for the full length of the contract (excluding any annual increases, which we will charge to you)

  2. Amendments

    No.

  3. Maintenance

    Optional.

  4. Recovery

    Optional.

  5. Excess mileage charge

    Yes.

  6. Possible additional costs

    If you get any fines (such as speeding or parking), we will transfer these to you where possible. When they need to be paid by us directly, we will do this and recharge you, including a £15 administration fee.