More flexibility with hire purchase
From an economic point of view, however, with hire purchase you are already the owner of the property for the entire period of use and keep it in the fixed assets and thus in your balance sheet. In return, you can not only depreciate the object for tax purposes, but also claim the financing interest as operating expenses.
The temporal aspect of this type of financing is also interesting: In contrast to leasing contracts, whose terms must be significantly shorter than the specifications in the depreciation tables, the term of a hire-purchase contract can cover up to 100 percent of the normal useful life. The treatment of VAT is also different compared to leasing: it is due in full at the start of the contract and is therefore deductible - including all instalments, possible down payments and the final instalment.
Hire purchase with Deutsche Leasing offers you these advantages:
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You immediately become the economic owner of the investment:
In contrast to leasing, you manage the object in the fixed assets of your company and thus in the balance sheet. -
You enjoy more flexibility:
The term of a hire-purchase agreement can cover up to 100 percent of the normal useful life. -
You pay the value added tax immediately:
At the start of the contract, the entire value-added tax for monthly instalments, down payments and final instalments is due and deductible. -
You automatically become the owner:
At the end of the contract period, the property also becomes legally and automatically your property.