For tax purposes you are treated as the owner from the outset of the finance agreement and can therefore claim any capital allowances available.

You are responsible for the maintenance and insurance of the equipment.

Key benefits of Hire Purchase:

• Certainty that the finance agreement cannot be withdrawn as long as you continue to abide by the terms and conditions of the contract. This contrasts with bank overdrafts which are repayable upon demand.
• The regular nature of repayments, and fixed interest rate, makes budgeting easier.
• A cost effective way to fund acquisitions. Using a traditional bank overdraft to fund equipment purchases can result in a growing hardcore of debt that can prove more costly to your business in the long run.
• Straightforward form of financing which leaves you in control of both the used equipment value and the claiming of capital allowances.

Another key difference to the hire purchase option is that whilst you cannot claim capital allowances, you are able to offset the lease repayments against any taxable profit.

You are responsible for the maintenance and insurance of the equipment.

Key benefits of Finance Lease:

• Certainty that the finance agreement cannot be withdrawn as long as you continue to abide by the terms and conditions of the contract. This contrasts with bank overdrafts which are repayable upon demand.
• The regular nature of repayments, and fixed interest rate, makes budgeting easier.
• A cost effective way to fund acquisitions. Using a traditional bank overdraft to fund equipment purchases can result in a growing hardcore of debt that can prove more costly to your business in the long run.
• Enhanced business cash flow with the ability to spread VAT across the life of the lease agreement.
• A straightforward form of leasing which leaves you in a position to control the used equipment value.

Like the finance lease option though, VAT is payable on each rental rather than at the outset of the agreement. Although you cannot claim capital allowances, you are able to offset rental payments against any taxable profit.

John Deere Credit contract hire* is an operating lease that also includes a professional maintenance package.

Key benefits of Operating Lease:

• Certainty that the rental agreement cannot be withdrawn as long as you continue to abide by the terms and conditions of the contract. This contrasts with bank overdrafts which are repayable upon demand.
• The regular nature of repayments, and fixed interest rate, makes budgeting easier.
• A cost effective way to fund acquisitions. Using a traditional bank overdraft to fund equipment purchases can result in a growing hardcore of debt that can prove more costly to your business in the long run.
• Enhanced business cash flow with lower payments than with hire purchase or finance lease and the ability to spread VAT across the life of the rental agreement.
• None of the uncertainty and effort associated with remarketing used equipment and the opportunity to develop a more planned equipment replacement cycle, ensuring you can benefit earlier from the latest productivity enhancing technology.

Key benefits of Contract Hire:

• Known running costs. Extending the principal of fixed interest costs, this type of agreement goes further and fixes all equipment usage and servicing costs for your business.
• Lower repair costs with preventive maintenance. Although a dealer maintenance plan will not cover the cost of repairs outside warranty, the likelihood of a major breakdown is reduced with more regularly maintained equipment.

*Note: operating lease and contract hire options offered through select dealerships on a select range of equipment. Make sure to ask your local dealer for availability.