Lease Purchase (Conditional Sale)

Lease Purchase Car Finance works by breaking the full cost of a car into three different types of payments, which provides a more flexible way of buying it.

The first payment is a deposit. How much the deposit is depends on the value of the car and the terms provided by the dealership. It will be a percentage of the total value, and while there might be a minimum amount you’re required to put down as part of the agreement, you can choose to pay more if you’re able to. 

Paying a larger deposit means you have less of the overall cost to pay, and your monthly repayments are likely to be lower.

After the deposit, you’ll pay a series of monthly instalments.

These are fixed at the same cost every month, for the duration of the agreement. You can usually choose the length of the agreement, which will help to determine how much the monthly payments are. 

If it’s two years, or 24 months, your monthly payments will be higher than if the Lease Purchase runs over 48 months, for example – though over a shorter term you’ll pay less total interest.

The last part is the final payment, commonly known as a balloon payment. This isn’t optional; you need to pay it. It will be a large lump sum. You can refinance to cover it, if you need to.

Getting a Lease Purchase agreement with Dick Lovett is simple:

1. Choose your new car. You can browse our full range online or call into our dealerships.

2. Ask us about lease purchase deals. Pay a deposit, agree the length of the finance agreement and a repayment schedule.

3. When all the paperwork is complete, just collect your new car from one of our Dealerships.

At the end of your Lease Purchase deal, you’ll move to the conditional sale part of the agreement.

You’ll need to pay for the rest of the car’s value – which is less the deposit, and the schedule of monthly repayments – and then, the vehicle is officially yours.

A Lease Purchase agreement is different to a Hire Purchase (HP) agreement. Both conclude with you owning the car, but with HP there is nothing further to pay.

With Lease Purchase, you need to settle the final payment – the balloon payment – to own the car.

You may be able to refinance the final payment instead of paying it in one lump sum, if you prefer. You could also potentially extend the monthly repayment period for longer.

Find car finance deals at Dick Lovett.