Lease Purchase is for people who would like to own a vehicle but do not necessarily have the money to buy one immediately. Lease Purchase is another type of vehicle finance, which is ideal for customers who eventually wish to take ownership of the car or van in the end of the agreement.
Lease Purchase is a flexible product and it is possible to put down a larger initial deposit, which has the advantage of reducing the monthly payments. The monthly cost is worked out on the difference between the retail value and the depreciation value plus interest. This means that choosing Lease Purchase for a vehicle which holds its value will often work in your favour.
The main difference between Lease Purchase and Contract Purchase is that instead of having the choice at the end of the contract to purchase the vehicle, which you would have with Contract Purchase, you have already entered into a contract to purchase the vehicle at the end of the contract with Lease Purchase.
This contract is only for those who are absolutely sure that they want to take ownership of the vehicle at the end of the contractual period and pay any balloon payment attached to the contract. Lease Purchase agreements typically last between 2 and 4 years although the agreement can be settled at any time throughout the contract.