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 Why
Lease Rather Than Buy? |
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With new vehicle prices continually rising
and the residual value of used vehicles falling,
the monetary cost of owning a car is on the
increase. Because of this trend, it is widely
accepted that there is little or no benefit
in purchasing most new vehicles outright due
to steep depreciation of the asset. For this
reason more and more of today’s forward
thinking companies are looking for a better
financial solution to vehicle acquisition.
Choosing one of our lease options will give
you the right to use a vehicle be it car or
commercial on pre-agreed terms. With fixed
term and low monthly rental they allow for
accurate company budgeting, minimal administration
and improved cash flow. |
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| For
Company Purchase: |
Contract Hire is
the leasing of a vehicle, normally to
a vat registered business, for a set
time and specified mileage. At the end
of the contractual period the vehicle
is returned to the
supplier.
The client is required to pay a fixed
amount each month over the life of the
contract with an initial fee, usually
equivalent to three months rental, required
up front. Roadside rescue, maintenance,
and relief vehicle provision are optional
extras, which can be included and charged
to the monthly rental payment.
Contract hire removes all the risks
associated with vehicle ownership- depreciation,
servicing, disposal etc, and because
the vehicle(s) is owned by the finance
company it does not have to be shown
as an asset on the company’s balance
sheet, giving improved financial gearing
for core business investment. |
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Contract Purchase
This method of funding is ideal for
companies who cannot fully reclaim vat
and is particularly suitable for financing
the more expensive cars on the fleet.
It offers all the operational and managerial
benefits of contract hire together with
the tax-efficient benefits of ownership,
such as the ability to claim capital
allowances.
The client makes fixed monthly payments
over the life of the agreement with
an initial fee usually equivalent to
three months rental up front and at
the end of the contracted period have
the opportunity to buy the vehicle by
paying a final pre-determined balloon
payment, legally transferring ownership
to them. Although this method protects
the client from the risk of depreciation
they will still be exposed to the risks
inherent in administering, maintaining
and in particular, disposing of a fleet.
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Finance Lease is
a vat free method of financing a vehicle
traditionally used by VAT registered
companies. It allows you many of the
benefits available from Contract Hire
whilst the risk and responsibility of
the disposal of the vehicle at the end
of the lease period remains with you.
A Finance Lease can be structured in
two ways, you can either choose to pay
the entire cost over the agreed lease
period plus interest charges or you
can pay lower monthly payments with
a deferred “Balloon” payment
at the end of the agreed term.
As a form of lease, ownership of the
vehicle remains solely with the supplier.
However the surplus proceeds from the
sale of the vehicle (whether you opt
to sell the vehicle or ask the supplier
to sell it on your behalf) go to the
client.
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Lease Purchase
is a method of financing a vehicle,
normally for vat registered companies
or businesses, it allows a business
to acquire ownership of the vehicle
at the end of the contract agreement
once the “option to purchase”
final payment has been made. The monthly
rental is determined by the cost of
the vehicle, the agreement period and
the estimated future value of the vehicle,
which is based on the proposed annual
mileage. Maintenance packages are usually
available if required.
Lease purchase is a cheaper monthly
alternative to hire purchase, the traditional
method of financing, and is written
on a hire purchase agreement with the
protections afforded by the consumer
credit act. |
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| Sale and Leaseback
is for companies looking to generate
capital from the sale of their vehicles
whilst retaining their use. Your fleet
is purchased at an agreed realistic
market value and is then leased back
to you through a funding method of your
choice. This vat beneficial scheme can
provide a welcome injection of cash
into a business. |
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| Daily
Rental: |
| Daily Rental operates in the same
manner as traditional contract hire,
but as the name suggests offer contracts
for shorter periods. This method is
suitable for companies with members
of staff on probationary periods, or
when vehicle requirements fluctuate.
Daily Rental provides an excellent stopgap
solution. |
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| For
Private and Company Purchase: |
Hire Purchase is
the traditional way of owning a vehicle
by making monthly repayments. It is
most likely that you will need to pay
an initial deposit (depending on the
finance company). Either way, monthly
repayments are made for an agreed time
and after the final repayment the car
is legally yours. Until such time it
legally belongs to the finance company,
There are two main types of hire purchase
scheme:-
Fixed- interest
hire purchase: monthly repayments
remain fixed throughout, Or,
Variable-rate hire purchase:
monthly repayments increase when interest
rates rise, and decrease when interest
rates fall. |
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| For
Private Purchase: |
P.C.P/Personal Contract
Purchase is highly attractive and
increasingly popular, combining fixed
low monthly payments with flexibility
at the end of the agreement, allowing
you to either buy the vehicle (by paying
an agreed minimum residual value), part
exchange it for another vehicle, sell
it privately (settling the balloon payment)
or subject to mileage and condition
return the vehicle with nothing more
to pay.
PCP is also ideal if you are opting
out of a company car scheme. You use
your company car allowance to fund your
PCP monthly payments without paying
company car tax. This option allows
the employee or individual to benefit
from fleet discounts and our bulk purchasing
power, resulting in lower monthly payments
so you can choose a higher specification
vehicle.
Personal
Contract Hire is designed for people
who don’t want the bother of ownership
or the expense of short-term rental.
It delivers all the benefits of a company
car to private purchasers at a fixed
monthly rental over an agreed term.
At the end of the contract term the
vehicle is returned to the finance company
with nothing further to pay (provided
that contract mileage has not been exceeded)
taking away the hassle of selling privately
and the worry over unexpected levels
of depreciation. |
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