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What is Lease Purchase (LP) car finance?
Lease Purchase is a type of car finance where you make fixed monthly payments over an agreed term, similar to a Hire Purchase (HP) agreement.
The main difference is that Lease Purchase includes a balloon payment (a large final payment) at the end of the contract to purchase the car in full if you choose to do so.
The lender bases the balloon payment on the car's predicted value at the end of the term. By deferring this payment, your monthly instalments are typically lower than a standard HP finance agreement.
LP provides flexibility, helping you manage your budget while securing your dream car.
“Josh and Nadim did a great job at sourcing and financing my new Bentley, they went above and beyond to assist me and were incredibly knowledgeable, I didn't feel pressured like I had at other dealerships. The staff at V12 Automobil were fantastic throughout, thanks again!”
Benefits of Lease Purchase (LP) car finance
Flexible deposit
You can choose a deposit amount that suits your budget, usually between 10% and 50% of the car's price.
Lower monthly payments
Lease Purchase is more affordable as the balloon payment at the end of the agreement reduces monthly payments.
No mileage limits
Lease Purchase allows you to drive freely without worrying about extra mileage charges.
Ownership at the end
Once the final payment is made, the vehicle is yours.
A higher spec vehicle
Lower monthly payments can help make a higher specification vehicle a more affordable option.
Tax benefits
LP offers tax allowances for businesses using the vehicle for business purposes.
What are my options at the end of a Lease Purchase agreement?
- 1
Pay the final payment and own the car — use existing funds or refinance the balloon payment.
- 2
Part-exchange the car — deduct the final payment from the trade-in value, and use any remaining equity towards your next vehicle.
- 3
Sell the car privately — retain any equity once the final payment has been paid.
Other finance options available
Hire Purchase (HP)
Hire Purchase offers fixed monthly payments and full ownership of the car once the agreement ends.
Find Out MorePersonal Contract Purchase (PCP)
PCP allows you to use the car until the contract ends before deciding whether to keep it or change it.
Find Out MoreCar Refinance
Refinancing your car is the hassle-free way of restructuring your funding, much like switching your mortgage.
Find Out MoreReleasing Equity
If you own a high-value vehicle and are looking for additional funds, you may be able to release some equity from your car.
Find Out MoreContact Us
Speak to our team about buying, selling or financing your next car.