Contract Purchase: What you need to know
Every business has unique needs and goals for their fleet. Some companies prefer to lease their vehicles, while others aim for outright ownership. For businesses that want the benefits of both, Contract Purchase could be the ideal solution. Let's demystify this often-overlooked option and show how it could optimise your fleet management.
What is Contract Purchase?
Contract Purchase is a unique financing option that brings together the benefits of both leasing and buying. It provides a flexible solution for businesses that want the option to own their fleet without the upfront costs that come with buying vehicles outright.
How does Contract Purchase work?
Under a Contract Purchase agreement, you agree to fixed-term monthly payments for your fleet of vehicles. And throughout the contract term, you enjoy all the perks of a managed vehicle, from regular maintenance to breakdown cover, bundled into your monthly payments.
The key differentiator of Contract Purchase is the option to buy the vehicle at the end of the contract. Once the term is over, you can choose to return the vehicle, extend the lease, or take ownership by paying a predetermined 'Option to Purchase' (or ‘balloon payment’) fee. This flexibility allows you to make the best decision for your business when the time comes.
