Contract purchase is a conditional sale agreement, structured as the user contracting to purchase the vehicle over a set period of time. It typically incorporates full maintenance (like contract hire). There is usually a final payment (ie a single large final payment) after which legal ownership passes to the user.

In practice most users do not make a final payment, opting instead to return the vehicle to the finance company, thereby avoiding the burden of disposal. The repayment figures and the maintenance element are based on time and mileage. Like other purchasing schemes the vehicle is purchased inclusive of VAT and repayments do not carry VAT except for the maintenance element, of which 100% is recoverable.