Vector Lease Purchase

Lease Purchase and Hire Purchase contracts provide a means to fund the outright purchase of assets and are the more traditional forms of finance. Business users claim first year capital allowances against the value of the equipment. In this way most of the tax benefits are claimed quickly. In subsequent years the interest relief is set against tax and the goods are gradually depreciated from the assets of the business.

Lease purchase plans can be ideal for funding digital ICT equipment, or in some cases for general business equipment and vehicles. The terms of rates are similar to leasing.

When choosing between lease and lease purchase, consideration should be given to the useful life of the equipment and the type of asset being financed. The final decision is usually governed by general cash flow and seasonal tax benefits. This is particularly relevant for some technical goods which may need to be upgraded every few years as the technology improves.