Key Product
Lease Purchase
A type of car finance where you pay fixed monthly instalments for a set period and then have the option to buy the car at the end of the contract
- Lease purchase is similar to personal contract purchase (PCP), but the final balloon payment is not optional and you have to buy the car or pay a penalty
- Lease purchase is suitable for people who want to own the car at the end of the contract and are confident they can afford the final payment
Some of the benefits and risks of lease purchase are:
Some of the benefits of Lease Purchase are:
- You can drive a new or nearly new car for lower monthly payments than a personal loan or hire purchase
- You can choose from a wide range of cars and customize your contract terms, such as the deposit, mileage limit, and duration
- You have the certainty of owning the car at the end of the contract, unlike PCP where you have to decide whether to buy or return the car
- You may benefit from lower interest rates, as the lender has more security over the car
Some of the risks of Lease Purchase are:
- You are committed to buying the car at the end of the contract, which means you have to pay a large final balloon payment that may be higher than the car's value
- You do not own the car until you make the final payment, which means you cannot sell or modify it without the lender's permission
- You may face extra charges if you exceed the agreed mileage limit, damage the car, or miss any payments
- You may have difficulty refinancing the final payment if your financial circumstances change or interest rates rise
