Contract Purchase

Contract Purchase is similar to Contract Hire, except you have the option to buy the vehicle at the end of the contract period. As well as offering lower initial capital outlay and Masterlease bearing the depreciation risk, Contract Purchase can be more attractive for expensive vehicles and for companies who cannot fully reclaim VAT*. Add some of the benefits that all of our customers enjoy - expertise, buying strength and transparent costs for instance - and it’s easy to see why Contract Purchase is a popular solution.

· Vehicles shown as assets on your balance sheet - as a result writing down allowances can be claimed

· The finance rental is VAT exempt and the VAT on maintenance is reclaimable

· We buy over 20,000 vehicles a year giving us significant leverage in negotiating discounts for our customers

· We specialise in handling every aspect of your fleet - giving you the opportunity to concentrate on your business

· As we assume residual value and - if you choose our maintenance option - running cost risks. It’s one less thing for you to worry about

· All costs are agreed in advance, helping you budget and avoid any interest rate risk

· No large capital outlay, freeing up capital for your business

Masterlease will source, purchase and lease you the vehicles you require, to an agreed age / mileage, for a fixed rental. We own the vehicles throughout the life of the contract until the final rental payment is made, and bear the responsibility for depreciation, road fund licence, administration and a range of additional services.

Monthly payments cover the depreciation / interest and clients are provided with a guaranteed purchase price to pay at the end of the contract. Ownership remains with Masterlease until the final payment and the option to purchase fee have been paid.

It is also possible to combine Contract Hire with Contract Purchase, decided on a vehicle by vehicle basis but effectively managed as a single contract. This ensures that we deliver the best value on each and every vehicle.

In addition, you can improve the administration of your fleet by combining Contract Purchase with any of our comprehensive maintenance and service options.

Advantages of Contract Purchase

· The asset is shown on the client’s balance sheet. Contract Purchase arrangements are treated for tax purposes as a purchase by the user when the car is brought into use. As a result, the 25% writing down allowance is claimed by the fleet user (maximum £3,000 per annum).

· Improved VAT efficiency. As a purchase agreement the finance rental is VAT exempt and the full VAT is reclaimable on the maintenance element.

· Clients will benefit from Masterlease’s expertise and buying strength. We have relationships with all manufacturers and buy around 20,000 vehicles a year. This gives us significant leverage when it comes to negotiating discounts with all UK vendors.

· The administrative burden of operating a company car fleet is borne by Masterlease. Without the hassle of attending to the details regarding your car fleet, valuable time is freed to concentrate on your own business.

· Masterlease clients avoid the Residual Value and running cost risks. We will assume the depreciation (and disposal if required) risk and will be responsible for areas such as breakdown cover and road fund licence.

· The cost to the client is known in advance. With transparent costs for the life of the contract, budgeting is easy, and will in turn help to improve your company cash flow, whilst not exposing you to any interest rate risk. By foregoing the large capital commitment required to acquire and run a vehicle you can put those funds where they are needed most, into your core activities.

* legislation under review