Asset Finance – Comparison of Types – Hire Purchase vs Finance Lease vs Operating Lease vs Contract Hire

comparison of types asset finance

Comparing Various Types of Asset Finance

As a borrower, you may feel the need to compare the various types of Asset Finance before finalising one. To help you in this regard, we have assembled a table that sums up the key features of 4 major types of Asset Finance.


Hire Purchase Finance Lease Operating Lease Contract Hire
Who owns the asset? You Lessor Lessor Lessor
Do repayments incur an interest? Yes No No No
Can you claim capital allowances? Yes No No No
Tax deductible component Interest on repayments Rentals Rentals Rentals
Can the asset remain off-balance sheet? No No Yes Yes
Is the VAT on repayments reclaimable? No Yes Yes Yes