Hire Purchase is an ideal choice for those looking for vehicle ownership, allowing you to spread the payments for a vehicle - and once all of the payments have been made the vehicle is yours.

A Hire Purchase with a balloon payment is simply a Hire Purchase agreement that features a "balloon" which defers payment of some of the capital until the end of the agreement. The vehicle is yours when all of the payments, including the " balloon", have been made.

All you have to decide is whether you want lower monthly rates with a balloon payment at the end or simple fixed payments over an agreed term.

There are just a few other straightforward options to consider too;

• You agree an appropriate deposit plus VAT (which is reclaimable).
• You make monthly or quarterly repayments that include interest for the agreed period.
• You can choose from fixed or variable interest rates.
• You can even choose to pay in advance or in arrears.

Mercedes-Benz Charterway Hire Purchase

Benefits & key features of Hire Purchase options

Entering into a Hire Purchase agreement isn't just straightforward, it also brings some great benefits for the business user;

• Interest is allowable against taxable profits
• Writing down allowances are claimable
• An additional line of Credit
• Vehicle is shown as an asset on the balance sheet
• Regular payments are kept low if a balloon is selected
• Repayments are not subject to VAT

Mercedes Agility is a method of acquisition similar to Hire Purchase, but in this case where monthly rentals can be kept low by agreeing a lump sum at the end of the term, referred to as the Guaranteed Future Value.

• You agree an appropriate deposit
• You make monthly or quarterly payments throughout the agreement term
• The monthly rentals are kept low by agreeing a lump sum at the end of the term. This amount is called the Guaranteed Future Value (GFV) and is based on the mileage you expect to do over the period
• At the end of the agreement you have four options:
  i) Pay off the final lump sum and keep your vehicle
  ii) Extend the agreement by spreading the balloon payment over a further agreed period
  iii) Return your vehicle, freeing you from any further obligations apart from an excess mileage charge if the estimated mileage has been exceeded, and damage charges over and above fair wear and tear
  iv) It may be possible to trade in your vehicle

Mercedes-Benz CharterWay Agility

All the same benefits as Hire Purchase plus;

• Regular payments are kept low
• Option to hand the vehicle back rather than make the final balloon payment

An Operating Lease is perhaps the most simple way to obtain a vehicle, where the vehicle is hired to you for a fixed period.
Monthly rentals are based on the difference between the price of the vehicle at the start of the agreement and its projected residual value, plus finance charged. Therefore only a proportion of the vehicle's value is being repaid which avoids any large initial outlay and reduces the monthly rental.

• At the end of the lease period the vehicle is simply returned, freeing you from any further obligations apart from any excess mileage or damage charges, if applicable.
  You agree an initial rental.
• You agree the mileage you wish to cover over the period of the agreement. This helps us determine the expected Residual Value of the vehicle at the end of the agreement.
• You simply pay monthly or quarterly rentals throughout the agreement.
• At the end of the agreement you just give the vehicle back.

Mercedes-Benz CharterWay Operating Lease

Benefits & key features of Operating Lease options

Cost-effective and easy to manage, an Operating Lease offers some great benefits for businesses;

• By including a guaranteed residual value, your monthly rentals are reduced
• There is no large initial deposit
• At the end of the lease period the vehicle is returned
• Fixed monthly rentals that fit your budget and protect you from unexpected bills
• For further peace of mind, add a Mercedes-Benz Service Contract
• Possibility to extend the lease in some instances
• Eliminates capital expense
• The vehicle does not show as an asset on the balance sheet
• An additional line of credit
• Rentals allowable against taxable profits (proportionally)
• VAT reclaimable depending on usage.

With a Finance Lease agreement, a vehicle is hired to you for a fixed period without the option of ownership. At the end of the contract, the proceeds from the sale of the vehicle, less a small fee, are returned to you. The basic details are;

• You agree an initial rental
• You pay monthly or quarterly for the use of a Mercedes vehicle over an agreed period
• At the end of the agreement the vehicle must be sold on to an independent third party. We will invoice the third party on your instruction and then return 95% of the sale price to you
• Alternatively you may return the vehicle to us. We will then sell it and return 95% of the net sale proceeds to you, after deductions and collection fees
• You can choose to pay a final lump sum to reduce the regular rentals

Mercedes-Benz CharterWay Finance Lease

Key business benefits

There are many advantages to a finance lease deal;

• You have use of the vehicle without a large capital outlay
• Improved cash flow with fixed monthly rentals
• VAT on rentals is reclaimable
• Rentals are allowable against taxable profits
• On balance sheet
• Your bus could benefit from the net sale proceeds
• Optional balloon payment will reduce your monthly/quarterly rentals
• An additional line of credit
• Option to extend at a peppercorn rental