Operational and funding efficiency to purchase your fleet
Contract Purchase from GE Capital, Fleet Services combines the service and operational benefits of contract hire with the taxation treatment of outright purchase.
How contract purchase works for you
Contract Purchase is a conditional sale agreement whereby the customer ultimately acquires title to the vehicle.
In calculating the re-payments, the vehicle’s residual value (future market value) is set as the final ‘balloon’ sum at the end of the contract. The vehicle is then purchased via a series of payments relating to the depreciated amount. These monthly payments comprise the capital interest and service elements and are based upon the VAT inclusive cost of the vehicle. As such there is no additional VAT applied to the payments.
Your options at the end of contract
After payment of the ‘balloon’ amount, you have a choice of options:-
1.
Guaranteed ‘Buy Back’ Option - where an amount equal to the balloon payment can be guaranteed at the beginning of the agreement and thereby guarantees the vehicles residual value, removing all financial risk, and injecting a key benefit of contract hire into what is essentially a purchase agreement.
2.
Disposal Option - where GE Capital, Fleet Services sells the vehicle on your behalf. We return the full sales proceeds to you after deduction of a sales agency fee, removing the administrative burden of vehicle disposal
3.
Purchase Option - simply keep the vehicle after making the final ‘balloon’ payment and thereby retaining all risks and rewards of ownership.
The built in benefits of contract purchase
- Efficient for vehicles with 100% first year allowances
- Efficient for VAT restricted businesses
- No large cash outlays are required
- Full capital allowances can be claimed
- Fixed repayments mean accurate financial planning
- Residual risk on resale of the vehicle can be removed
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