This is an enhanced form of Hire Purchase. The advantages include a low deposit and reduced monthly payments. This is possible because a balloon payment, which is a percentage of the anticipated value of the car, is deferred until the end of the agreement.

The interest rate is fixed at the start of the agreement and does not vary, irrespective of how interest rates may change over the period.

Although this type of agreement is linked to Finance House Base Rate, payments are calculated at a margin above Finance House Base Rate and the monthly payments are fixed for the duration of the agreement. At the end of your agreement a balancing calculation, linked to Finance House Base Rate is made to check the way interest rates have moved. Balanced Payments agreements can be structured either with or without a balloon payment to help meet your monthly payment requirements.

The capital and interest elements of the payments are treated separately. A fixed amount of capital is repaid each month. Interest is charged on the reducing balance at a margin above Finance House Base Rate. This type of agreement can also be structured with or without a balloon payment. Lease Purchase variable rate is only available for the Business User.

• If you choose an agreement structured with a balloon payment your monthly payments will be reduced as a large percentage of the balance owed on the car is deferred until the end of your agreement, with obvious cashflow advantages.
• Your initial capital outlay is reduced allowing your funds to be retained in the business.
• The interest may be allowable against tax.
• You could fund your car as an asset on your balance sheet.
• You may be able to claim writing down allowances.
• The finance element of your agreement is not subject to VAT.

For further information please contact your Porsche Centre .