Contract Purchase
With Contract Purchase the “future value” of the vehicle is guaranteed, so that the customer is protected against the risks of the market place. This figure is called the “Guaranteed Minimum Future Value” (GMFV)
The GMFV becomes the final balloon payment and is deducted from the overall balance. With a contract purchase agreement the customer has 3 options at the end of the contract.
1) Pay off the balloon and own the vehicle.
2) Part exchange the vehicle. The balloon is settled from the sale proceeds and any equity is the customers to put towards their new vehicle.
3) Return the vehicle and walk away.
This method is an on balance sheet method of funding. A company can purchase the vehicle at the end of the contract by making a balloon payment.
Contract Purchase is ideal for those companies who are restricted by the amount that they can claim back on VAT.
If you didn't want to purchase the vehicle at the end of your contract then we can purchase your vehicle at the balloon value and remove any risk on the residual value.
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Benefits of Contract Purchase |
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Releasing the cash value of a fleet provides a straightforward method of raising additional funds for your company. |
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No administrative burden |
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Professional advice, risk free maintenance and access to a comprehensive service package. |
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Depreciation and running cost risks removed. |
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Transparent costs improve budgeting and cash flow |
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Windmill leasing can dispose of your vehicle at the end of the contract |
