Contract Purchase differs significantly from Hire Purchase in three main ways.

You decide if you want to own the vehicle at the end of the term

If you decide to get rid of the van at the end of the period, you don't have to worry about selling it. Disposal and any fall in the second-hand values is the finance company's problem, as they guarantee the van's minimum value from day one.

The structure of the agreement is more complex and flexible than Hire Purchase:

You pay a deposit – the amount is usually flexible.

Then you make fixed monthly payments for an agreed period. These payments are usually far lower than those on a hire purchase scheme.

At the end of the term you have three choices:

• You make the final pre-agreed balloon payment to own the van.
• You hand the van back with nothing to pay as long as the van meets the pre-agreed condition and mileage limits.
• You trade the van in for another. In this case too, you don't make the final balloon payment. Instead, it is covered by the van's second-hand value (again provided it meets the pre-agreed mileage and condition limits). If the van is worth more than the balloon payment, you can put the extra amount towards another contract purchase vehicle with the same finance company.

Call us now on