Funding Methods - Hire Purchase

Disadvantages:

Ø Inflexible: difficult to escape the outstanding settlement if, say, a vehicle is no longer needed.
Ø High deposit compared with Contract Hire.
Ø Appears as a debt on the balance sheet which could inhibit future borrowing.
Ø Can be more expensive than Contract Hire due to 1995 VAT changes.
Ø Burden of controlling and running the fleet.