A Lease Purchase finance agreement is essentially the same as a Hire Purchase, but with the addition of a balloon payment.
Lease Purchase agreements can be regulated, exempt or unregulated, depending on the circumstances of the agreement.
With Lease Purchase, there are no mileage restrictions, but there may be certain restrictions on where you can use or keep the vehicle, so it’s worth checking all this beforehand.
Deposits are normally optional and can be paid in cash or through any equity from an existing vehicle.
It’s worth noting that there may be an arrangement fee, which could be paid either at the start of the agreement or as part of the monthly payments. This fee may vary depending on the lender.
There may also be an option to purchase fee at the end of the agreement.
Payments
Payments are generally monthly instalments and will consist of the amount borrowed plus interest. The agreed period is usually up to five years.
At the end of this period (and once all payments have been made), you own the vehicle.
At the End of the Agreement
If you wish to settle the agreement early, you may do so by paying off any outstanding finance and fees that are due.
