| Meeting your Requirements | Contract Hire | Contract Purchase | Finance Lease | Personal Contract Purchase | Outright Purchase |
|---|---|---|---|---|---|
| C02 emissions offset | |||||
| VAT recoverable on monthly rentals | |||||
| Accurate Monthly Budgeting | |||||
| Improved cash flow | |||||
| Minimum Capital Expenditure | |||||
| Fixed Interest Rate | N/A | ||||
| Capital Allowances Available | |||||
| Rental allowable Against taxable income | N/A | ||||
| Ownership of Vehicle | |||||
| VAT chargeable On rental | |||||
| No depreciation risk | |||||
| No disposal problems | |||||
| Reduced administration | |||||
| Road fund licence provided | ** | ||||
| Breakdown rescue cover | |||||
| Replacement vehicle | |||||
| Fixed cost maintenance |
** Road fund licence provided for the first year.
Back to menuBusinesses that have historically paid cash, used a bank loan, or traditional Hire Purchase schemes have found switching to Carbon Neutral Contract Hire an environmentally friendly 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, and in a similar way to maintenance the cost to offset your CO2 emissions is built into the monthly payment. Annual Road Fund Licence is included in the monthly rental for the duration of the contract.
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.
Carbon Neutral Contract Purchase for Business is a highly flexible, environmentally friendly & 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 Carbon Neutral 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, and in a similar way to maintenance the cost to offset your Co2 emissions is built into the monthly payment.
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.
Pay the final payment and keep the vehicle.
Sell the vehicle on the open market releasing any available equity to form a deposit for your next vehicle.
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.
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.
You can make the vehicle on Finance Lease Carbon Neutral as the cost to neutralize your CO2 emissions is built into the monthly payment.
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.
** 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)
Carbon Neutral Personal Contract Purchase is a highly flexible, environmentally friendly & 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 Carbon Neutral 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, and in a similar way to maintenance the cost to offset your Co2 emissions is built into the monthly payment.
Carbon Neutral 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.
Pay the final payment and keep the vehicle.
Sell the vehicle on the open market releasing any available equity to form a deposit for your replacement vehicle.
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.
