|
|
Outright
Purchase |
Lease
Purchase or
Hire Purchase (HP) |
Finance
Lease |
Contract
Hire |
Contract
Purchase |
| Who
owns the vehicle? |
The Customer |
The Funding Company until the
final payment is made |
The Funding Company until the
final payment is made |
The Funding Company |
The Funding Company until the
final payment is made |
| Who
carries the Residual Value risk? |
The Customer |
The Customer |
The Customer |
The Funding Company |
The Funding Company |
| Who
carries the ongoing Maintenance risk? |
The Customer |
The Customer |
The Customer |
The Funding Company assuming
a maintenance contract is taken |
The Funding Company assuming
a maintenance contract is taken |
| Is
the vehicle on or off the balance sheet? |
On balance sheet |
On balance sheet |
On balance sheet |
Off the balance sheet |
On balance sheet |
| Typically,
how much cash is required up front? |
100% of vehicle purchase price |
Typically 15% of purchase price |
Typically 15% of purchase price |
Typically 6-7% of the purchase
price (i.e. 3 months advance rental) |
Typically 6-7% of the purchase
price (i.e. 3 months advance rental) |
| Who
arranges delivery and collection of the vehicle? |
The Customer |
The Customer |
The Customer |
The Funding Company |
The Funding Company |
| Does
the customer own the vehicle at the end of the
contact? |
Yes |
Yes |
No |
No |
Yes, if the final lump sum purchase
payment is made |
| Can
the monthly payments be offset in full against
tax? |
There are no monthly payments.
Capital Allowances can be offset against tax but
are limited to 25% or the vehicle price of £3000
per annum whichever is the greater. |
The finance element can be offset.
Capital allowances are available as per "outright
purchase" |
All of the monthly rentals may
be offset against tax. For vehicles costing over
£12,000 a proportion is disallowed. |
All of the monthly rentals may
be offset against tax. For vehicles costing over
£12,000 a proportion is disallowed. In addition
100% of the maintenance payments may be fully
offset. |
The finance element is allowable
with no rental restriction for cars over £12,000.
Capital Allowances are also available. |
| Assuming
some private use, what % of input VAT can be reclaimed? |
None |
None |
50% of the VAT on rental payments.
100% of the VAT on maintenance. |
50% of the VAT on rental payments.
100% of the VAT on maintenance. |
None |
