Hire Purchase is an ideal choice if you are looking for vehicle ownership, allowing you to spread the payments for a vehicle.
Once all of the payments have been made you own the vehicle. You effectively hire a vehicle from Baruch Capital for an agreed fixed term at the end of which, upon payment of an agreed nominal Option to Purchase fee, ownership passes to you. Whilst legal title in the asset will belong to Baruch Capital until the end of the agreement, you would be the Registered Keeper and may show the asset on your balance sheet plus claim the appropriate capital allowances. Your cash-flow benefits as you do not need to use your cash resources to make a capital outlay for the total purchase price of the asset up front.
Payments can be tailored to suit the cash flow needs of your business, making budgeting easier as the payment structure is agreed with you at the outset. Acquiring new vehicles under a Hire Purchase agreement also has tax advantages, in that you claim the writing down allowances and the interest elements of the repayments are allowable against taxable profits.
- Ownership at the end of term upon payment of a nominal Option to Purchase fee
- On balance sheet
- Capital allowances can be claimed
- Repayments can be matched to the pattern of your cash-flow