This topic covered Lease Purchase.
- A Lease Purchase is similar to a Hire Purchase or Conditional Sale agreement except that payments are structured like a lease agreement where the customer makes a number of payments in advance rather than a deposit.
- A balloon payment can also be incorporated into an agreement, which represents the future residual value of the vehicle.
- As it is a purchase plan, the payments do not attract VAT and the customer can take title/ownership of the vehicle at the end of the agreement.
- Lease Purchase agreements can be regulated, exempt and unregulated under the consumer credit regulation depending on the type of customer and the amount of credit.