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Contract purchase allows you to purchase a vehicle for a predetermined period, which is usually 18 to 48 months
- Initial payment is normally 3 months, but others deposits are available
- You have the option of including full maintenance or no maintenance
- Road tax is included in the rentals
- You have the option of owning the vehicle at the end of the purchase agreement
- The rentals are not subject to VAT
Contract Purchase provides companies with all the benefits of contract hire, with the added value of savings on corporation tax and VAT. It is designed for higher value vehicles and is particularly relevant if you are unable to claim back VAT. All charges - finance and maintenance - can be claimed against corporation tax, whatever the capital value of the vehicle. The key difference compared with conventional contract hire is that the customer has the option of buying the vehicle at the end of the contract. This means that contract purchase has to be included on the company's balance sheet.
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