Hire purchase is where the asset being financed is to be capitalised on the customer side (hire purchaser).
Because hire purchase is a sale by instalments of the asset to the hire purchaser by the leasing company, the VAT on entire hire-purchase amount (= hire purchase-instalment x contract term) is payable with the first hire-purchase instalment.
At the end of the term, title to the asset passes to the hire purchaser on payment of the final instalment.
Hire purchase is recommended primarily where:
- The investment asset will be used over a longer period.
- The investment asset is not subject to the pressure of short innovation cycles and not specifically tailored to a given company.
- The asset is not readily suited to use by a third party.
Hire purchase agreements are often entered into to enable customers to receive state investment allowances from which leasing investments are excluded.
Our asset portfolio focuses on the following areas:
- Cars, trucks, buses, trailers etc.
- Fabricating and processing machinery
- Facilities, medical devices and assets for the renewable energies field
- Office and commercial equipment
- Other assets
Would you like to take out hire purchase financing for an asset? Then drop us a line.
Your contact at our subsidiary >NORD/LB Leasing is listed at the top right of this page.