What is the difference between hire purchase and leasing?

Both let you use an asset while spreading the cost, but they end in different places.

• Hire purchase. You pay a deposit and fixed instalments, and once the final payment is made the asset is yours. It suits equipment you want to own and keep for the long term, such as core machinery.
• Leasing. You pay to use the asset over an agreed term. Ongoing payments are often lower, and at the end you typically return, upgrade or extend rather than own it outright. It suits assets that date quickly or that you expect to replace, so you are not left owning obsolete kit.

Within leasing there are variations. A finance lease puts the asset on your balance sheet and you carry more of the risk and reward. An operating lease is closer to pure rental, often with the provider retaining more responsibility for the asset. How each is treated in your accounts is a question for your accountant.

The simple way to choose: if you want to own it and keep it, hire purchase usually wins. If you want lower payments, flexibility, and the ability to upgrade, leasing usually does. We will line up the options and the numbers so the choice is clear.