The following regulated finance products are arranged and managed by Instant Business Manager Ltd

HIRE PURCHASE (HP) WITH BALLOON

HIRE PURCHASE WITH A BALLOON OFFERS GREATER FLEXIBILITY BY DEFERRING A PORTION OF THE REPAYMENT TO THE END OF THE AGREEMENT. THIS RESULTS IN LOWER FIXED MONTHLY PAYMENTS COMPARED TO STANDARD HIRE PURCHASE.

How it works: You pay a deposit (typically 10-50%) and fixed monthly installments over an agreed term (12-60 months). However, a larger lump sum—known as the “Balloon Payment”—is set aside until the end of the contract. This figure is calculated based on the estimated future value of the vehicle.

Your Options at the End of the Agreement: At the end of the term, to gain ownership of the vehicle, you must pay the final Balloon Payment. Your options typically include:

• Pay the Balloon: Make the final payment to own the car outright.
• Refinance: Subject to status, you may be able to refinance the balloon amount.
• Part-Exchange: Use any equity in the car toward your next vehicle.

The Benefits of HP with a Balloon:

• Improved Cash Flow: Lower monthly payments keep more capital in your business or pocket.
• Flexibility: Allows for higher-specification vehicles for a lower monthly outlay.
• Fixed Interest: Your rate is locked in for the duration of the term.

Important Note: Ownership is only transferred once the final Balloon Payment and any option-to-purchase fees are paid in full. Please ensure you have a plan in place to cover the final lump sum at the end of your agreement.

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