Hire purchase works like instalment financing.

The buyer acquires an item and pays regular instalments over a particular period of time. In contrast to instalment purchasing, however, the buyer is only granted ownership after the item has been fully paid for.

As with leasing, 100% financing is also possible with hire purchase.

The hire purchase agreement is based on a form of contract in which the vendor is the legal owner, whilst the investor is granted commercial ownership.

The hire purchase agreement is particularly suitable if public subsidies are to be used which are linked to the customer's accounting system.

The investor enters the item in the assets of his accounts and depreciates it according to the guidelines, so that, in addition to the depreciation, he can also claim the interest paid as an operating expense. Investment grants and other subsidies can thus be utilised by the investor.

Hire purchase is characterised by the following:

• The ownership under civil law passes automatically to the customer after the end of the contract when the last instalment is paid without further costs.
• The entire value-added tax on the total of all instalments can be deducted at the start of the contract.
• Commercial assignability (entry in accounts) is with the customer.
• The terms are fixed over the whole contract duration and offer a clear basis for calculation.
• The duration may vary and can, if the customer wishes, account for up to 100% of the operational usage period (depreciation).

We would be happy to discuss your financing needs with you.