HP vs Finance Lease for Concrete Pumps & Mixers

HP and Finance Lease: How They Work

Hire Purchase (HP)

Fixed monthly payments over agreed term
You own the asset at the end of the agreement
Asset appears on your balance sheet from day one
You can claim capital allowances (AIA/WDA)
Refinancing or early settlement available
Best for: assets with strong residual values that you intend to keep long-term

Finance Lease

Fixed monthly rentals over primary lease period
Asset remains with the finance company - you return or re-lease at end
Lease rentals are fully deductible as a business expense
Lower monthly payments than HP (residual value retained)
Used for assets where ownership is not the priority
Best for: large batching plants and assets you may want to hand back

For most concrete pump hire companies, Hire Purchase is the more common choice - truck-mounted boom pumps hold value well and ownership at the end of the term gives the business a valuable unencumbered asset. Finance Lease is more relevant for large batching plants where the equipment may be tied to a specific site and the business wants flexibility at the end of the term.

Worked Example: Putzmeister M52-5 Truck-Mounted Concrete Pump at £350,000

Assumptions: Limited company, 8 years trading, clean credit, 5-year term, rate 5.5% HP / 5% Finance Lease (Finance Lease rate lower due to residual value retained by lender).

Hire Purchase

Asset price: £350,000
Deposit (10%): £35,000
Amount financed: £315,000
Rate (HP): 5.5% p.a.
Term: 60 months
Monthly payment: ~£6,040
Total repaid: ~£362,400
Total interest: ~£47,400
Ownership: Yours at term end

Finance Lease

Asset price: £350,000
Deposit: £0 (advance rental possible)
Residual value retained: ~£70,000 (20%)
Rate (lease): 5.0% p.a.
Term: 60 months
Monthly rental: ~£5,290
Total rentals: ~£317,400
End of term option: Return, re-lease, or sell (99% proceeds to you)
Ownership: Finance company

Decision Guide: Which to Choose

Factor	Hire Purchase	Finance Lease
Monthly payment level	Higher (full asset cost)	Lower (residual retained)
Ownership at term end	Yes - yours	No - lender's
Balance sheet treatment	Capitalised from day one	Lease liability (IFRS 16)
Tax treatment	Capital allowances (AIA/WDA)	Lease rentals deductible
Best for concrete pumps?	Yes - strong residuals	Better for batching plants
End-of-term flexibility	Early settlement possible	Return, re-lease, or sell
Rate (typical)	5%–12%	4.5%–10%

Frequently asked questions

Is HP or Finance Lease better for a concrete pump?

For most concrete pump hire companies, HP is the better choice. Truck-mounted boom pumps hold their value well and ownership at term end gives you a valuable unencumbered asset worth significant money.

Can I finance a concrete batching plant on Finance Lease?

Yes, and Finance Lease is often preferred for batching plants. It avoids complex ownership transfer issues for fixed installations, gives you fully deductible lease payments, and offers flexibility at term end.

What are the tax differences between HP and Finance Lease for concrete equipment?

Under HP, you own the asset and can claim capital allowances (AIA up to £1m, then WDA). Under Finance Lease, lease payments are deductible as revenue expenditure. The better option depends on your tax position - discuss with your accountant.

What rate can I expect for HP vs Finance Lease on a concrete pump?

Finance Lease rates are often slightly lower than HP rates for the same asset and credit profile, because the lender retains a residual value interest. For a £350,000 boom pump, the difference might be 0.5%–1.5% in favour of Finance Lease.

Which type of concrete finance is more common for pump hire companies?

HP is significantly more common for concrete pump hire businesses. The ability to own the pump outright at term end and the strong resale market for Putzmeister and Schwing equipment makes HP the natural choice for the pump hire sector.