Hire Purchase

Key features and benefits of Hire Purchase

With hire purchase you own the asset at the end of the agreement.*
Typical minimum deposit of 10% plus VAT on the net cost of the asset being financed.
Minimum hire purchase term is two years, maximum typically seven years.
Fixed or variable interest rates.
Repay over a term that suits your cash flow.
Select your own supplier and negotiate as if it were a cash deal.
For tax purposes the asset is deemed to belong to you so you can claim any capital allowances available.

Hire Purchase is the traditional method of financing a new piece of equipment with the asset becoming the property of the lessee at the end of the period. The monthly payment is determined by the amount of deposit paid, the period of the contract and the sale price of the equipment.

The loan itself is secured against the asset. This makes obtaining finance easier than trying for an unsecured loan and is usually cheaper.

* Be aware that monthly repayments will be higher than they would be during a personal contract purchase and you will not own your vehicle until the last payment has been made. The lender could repossess your vehicle at any time if the payments are not kept up.

Very few companies today pay cash for asset buys as this can be a drain on working capital, purchasing by hire purchase is therefore one of the main options used. The asset is acquired over a period of time known as (the hire period) and by making regularly agreed repayments.

When buying on HP, the process is simple and fast - just select the equipment and supplier and we will arrange finance, usually a repayment plan, for the equipment over between two and five years, after which time the equipment will be entirely your property.

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AVS Commercial Finance

Hire Purchase