Currently the most common type of business vehicle finance.

You pay the cost of the vehicle, plus interest, in instalments and just a deposit upfront.

The resale value isn’t a factor in the finance agreement, since you’ll own the vehicle at the end of the term.

You’ll own the vehicle once all payments have been made.

You rent the vehicle but are responsible for its maintenance and repairs.

Typically, the vehicle is sold to a third party at the end of the lease term. If the resale value is higher than initially estimated, you may receive a share or rebate of the excess.

If the vehicle sells for less than the agreed estimate, you may be liable for the shortfall.

You pay fixed monthly instalments, but the finance company retains ownership and responsibility.

Services, breakdowns and road tax are typically included in the monthly payments. There are mileage limits and no option to purchase at the end of the term.

If the vehicle’s value drops below the estimate, the finance company is responsible for that cost.

You pay monthly instalments, but you must buy the vehicle at the end - it’s not optional.

Repayments are calculated with the current price and estimated resale value in mind. You can typically expect lower repayments compared to Hire Purchase, but a higher balloon payment at the end.

You are responsible for maintenance and services.