Car & Van Leasing Information

Choosing Your Funding Method

** Road fund licence provided for the first year.

Contract Hire for Business Explained

"In an age where risk is difficult to manage – Contract Hire is risk free to customers"

Businesses that have historically paid cash, used a bank loan, or traditional Hire Purchase schemes have found switching to Contract Hire a cost effective option.

Current VAT legislation allows Leasing Companies to reclaim the VAT on new or 'VAT qualifying' used vehicle (less than 3 months old). The benefit is passed on to you as lower monthly rentals. Not only does Contract Hire allow you to run a new vehicle for an inclusive, fixed monthly rental but it also releases valuable capital for your business. Contract Hire means you can afford an even better vehicle than you may initially have thought.

For a small additional monthly cost Contract Hire can offer a package to include routine servicing and maintenance and optional relief vehicle. You can choose to have your maintenance work carried out at your local dealer. Maintenance packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

At the end of your agreement we arrange to collect the vehicle free of charge from your home or office address. You have no time-consuming disposal issues or worries over depreciation of the vehicle.

If you business is VAT registered, VAT is reclaimable on the rentals, based on 50% of the VAT on the finance element (assuming some private use) and 100% of the VAT for any maintenance charges.

Key Benefits of Contract Hire For Business

• Contract Hire offers complete peace of mind
• Low initial outlay usually from just 3 month's payment
• Flexible terms from 24 to 48 months
• Road Fund Licence included in the monthly rental
• No depreciation risks
• Offers the ability to show the vehicle off your balance sheet
• A proportion of the rentals allowable against tax
• Offers optional monthly maintenance & relief vehicle packages
• Gives you the ability to forward plan
• Offers the lowest fixed monthly rentals
• Simple 'hand back' process at the end of the contract
• Removes time consuming disposal issues
• Makes more capital available to you
• VAT reclaimable on a proportion of the rentals

Contract Purchase for Business Explained

Contract Purchase for Business is a flexible & affordable way of driving your new vehicle.

Businesses that have historically paid cash, used a bank loan, or traditional Hire Purchase schemes have found switching to Contract Purchase an environmentally friendly cost-effective option.

There is a deposit payable, from just 3 month's payment in advance, followed by a series of fixed monthly payments over an agreed period between 24 and 48 months. Unlike a bank loan or traditional Hire Purchase scheme your monthly payments are calculated on the difference between the initial purchase value of the vehicle and its projected residual value at the end of the contract, this has the effect of making the monthly payments surprisingly low. For this reason your company may find that you can choose from a wider range of cars than you had originally thought.

This form of vehicle funding can ease cash flow and free up valuable capital that can be used more effectively elsewhere within the business. Business Contract Purchase provides your business with a number of benefits. The car appears as an asset in the business or company accounts and a proportion of its value can be written down against taxable profits. Interest payments are also allowable against tax.

You can also choose to include a maintenance package to cover the cost of routine servicing and maintenance for a small increase to the monthly rentals. Maintenance work can be carried out at your local dealer. These packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

Business Contract Purchase gives you the option to own the vehicle at the end of the Contract period but with the security of a guaranteed future value should the vehicle be worth less than the anticipated market value.

This means you have 3 options at the end of your Business Contract Purchase agreement:

Option 1

Pay the final payment and keep the vehicle.

Option 2

Sell the vehicle on the open market releasing any available equity to form a deposit for your next vehicle.

Option 3

Simply return the vehicle without making the final payment. This releases you from further obligation except for excess mileage and vehicle damage charges should the estimated mileage agreement be exceeded or any damage be considered greater than fair wear and tear.

Key Benefits of Contract Purchase for Business

• Gives you complete peace of mind
• Low initial outlay from just 3 month's payment
• Flexible terms from 24 to 48 months
• Includes Road Fund Licence for the first 12 months
• No depreciation risks
• A proportion of the rentals allowable against tax
• Allows your vehicle to displayed on your balance sheet
• A proportion of interest charges reclaimable against tax
• Allows a writing down allowance
• Offers optional monthly maintenance packages**
• Gives you the ability to forward plan
• 'Opportunity to Buy' at the end of the contract **
• Makes more capital available to you
• Removes time consuming disposal issues*

Finance Lease for Business Explained

Think of Business Finance Lease as a rental agreement that offers significant tax advantages, particularly if your business is VAT registered. Using this method to acquire your vehicles will make budgeting easier for your business.

If you opt for a 'Balloon**' style Finance Lease your monthly rentals will reduce even further because the estimated resale value of the car is taken into account when the payments are calculated. This value is then offset to the end of the agreement, thereby reducing your rental payments. At the end of your lease agreement, you must sell the vehicle to a third party that is not connected to your business

With a Finance Lease your sales proceeds will first need to cover your outstanding 'balloon' payment and any balance will then be refunded to you. Any shortfall remaining from the 'balloon', however, will be your responsibility to settle.

VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming some private use) in a similar way to Contract Hire.

Please be aware that whilst you may benefit from the sale of your vehicle you could also be required to cover the potential shortfall. Finance Lease does not offer complete peace of mind and customers looking for no risk on vehicle disposal may be better suited to Contract Hire.

Key Benefits** of Finance Lease for Business

• Low initial outlay from just 1 month's payment
• Flexible terms from 24 to 48 months
• Choice of rental period
• Ability to show the vehicle off your balance sheet
• More capital available for your business
• Improved cash flow
• You could benefit from the sale of the vehicle to a third party
• VAT reclaimable on the rentals***

** Subject to terms and conditions of the agreement.
*** VAT registered businesses
* VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming some private use)

Personal Contract Purchase Explained

Personal Contract Purchase is a highly flexible & affordable way of driving your new vehicle. If you usually fund your vehicles with cash, a bank loan, or through a traditional Hire Purchase scheme, you may find Contract Purchase a far more convenient method. This scheme is especially suitable for drivers opting out of Company car Schemes.

You pay an initial deposit, from just 3 month's payment in advance, which is followed by a pre agreed number of fixed monthly payments usually between 24 and 48. Monthly payments are calculated on the difference between the initial purchase value of the vehicle and its projected residual value at the end of the contract, this has the effect of lowering the monthly payments and you may find you can afford a better car. The guaranteed future value means you don't have any residual or disposal worries.

For a small increase to the monthly rentals you can include a maintenance package to cover the cost of routine servicing and maintenance. Maintenance work can be carried out at your local dealer. These packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

Personal Contract Purchase gives you the option to own the vehicle at the end of the Contract period but with the security of a guaranteed future value should the vehicle be worth less than the anticipated market value.

This means you have 3 options at the end of your Personal Contract Purchase agreement:

Option 1

Pay the final payment and keep the vehicle.

Option 2

Sell the vehicle on the open market releasing any available equity to form a deposit for your replacement vehicle.

Option 3

Simply return the vehicle without making the final payment. This releases you from further obligation except for excess mileage and vehicle damage charges should the estimated mileage agreement be exceeded or any damage be considered greater than fair wear and tear.

Key Benefits of Personal Contract Purchase

• Gives you complete peace of mind
• Offers a low initial outlay from just 3 month's payment
• Flexible terms from 24 to 48 months
• Road Fund Licence for an initial 12 months
• Allows individuals to enjoy corporate rates
• No depreciation risks
• Offers optional monthly maintenance packages**
• Opportunity to Buy at contract maturity**
• Removes time consuming disposal issues*