Lease vs HP Comparison
| Feature | Hire Purchase | Finance Lease |
|---|---|---|
| Monthly cost | Higher | Lower |
| Ownership | Yes - at term end | No - lender owns throughout |
| VAT on monthly payment | No (HP is exempt) | Yes (on rentals) |
| Balance sheet | Asset & liability | Typically off B/S (pre-IFRS 16) |
| Capital allowances | Yes (restricted for high CO2) | No - rentals deductible |
| Balloon | None | Yes - residual value |
| Best for | Long-term ownership | Business / lower monthly |
Same £180,000 Bentley - HP vs Lease
| Parameter | Hire Purchase | Finance Lease |
|---|---|---|
| Vehicle Value | £180,000 | £180,000 |
| Deposit (20%) | £36,000 | £36,000 |
| Balloon | None | £54,000 (30%) |
| Term | 48 months | 48 months |
| APR | 8.5% | 8.5% |
| Monthly Payment | approx. £3,551 | approx. £2,454 |
| Ownership at end | Yes | No (extend or sell) |