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Contract hire : Flexible Lease : Personal Contract Plan : Conditional / Unconditional Sale

Contract Hire

This is the solution for companies who want to concentrate on their core business activities, while avoiding the financial risk and administrative burden of owning their own fleet.

The monthly rental charge is based upon the cost of the vehicle, the contract period and the anticipated resale value. It also takes into consideration the predicted mileage, service and maintenance costs.

Some of the key benefits & features include:

  1. Fixed rentals for the term, allowing easier budgeting
  2. Flexible terms to meet your requirements, with various duration and mileage options
  3. Full Maintenance for the vehicles can be included in the monthly rentals, allowing you to spread the running costs
  4. Contract Hire removes depreciating assets from the balance sheet, thus improving company gearing ratio’s
  5. Flexible invoice arrangements help to considerably reduce administration
  6. Where a vehicle has private use then 50% of the VAT on rentals is recoverable, whereas the service and maintenance elements of the rental are fully recoverable

Personal Contract Hire

This is the solution for private individuals and is becoming more popular amongst car users opting out of company car schemes.

Some of the key benefits & features include:

  1. Fixed Rentals for the whole package
  2. Flexible durations and mileage parameters to meet your requirements
  3. Maintenance of the vehicle can be included to spread running costs

Finance Lease

Finance Lease is a tax efficient option where you choose to pay either the entire cost of the vehicle, including interest charges over an agreed lease period or opt to pay lower monthly rentals with a final payment based on the anticipated resale value of the vehicle.

At the commencement of the contract, usage parameters for the vehicle are agreed and assuming this does not vary, monthly payments and interest rates are fixed for the duration of the contract. Therefore you benefit from fixed costs but do not take on the administration and operating risks. At the conclusion of the contract you can continue to operate the vehicle under a ‘peppercorn agreement’ although you will at no time take ownership of the vehicle.

Although the ownership remains with the leasing company for the duration of the contract, the car does appear on the balance sheet.

Lease Purchase

Lease Purchase is a method of financing a vehicle, normally for vat registered companies. The monthly rental is determined by the cost of the vehicle, the period of rental and the estimated future value based on the proposed annual mileage.

A payment equivalent to the estimated future value is payable at the end of the contract, when the vehicle becomes the property of the leasee.

Lease Purchase is a cheaper monthly alternative to Hire Purchase, the traditional method of financing.

Contract Purchase

Companies who want to own their vehicles, but wish to avoid taking depreciation risks, prefer this option.

Some of the key benefits & features include:

  1. Similar benefits to contract hire regarding fixed payments and flexible terms
  2. Maintenance can also be included
  3. The finance company guarantees the resale value of the vehicle at the end of the contract for a known, fixed amount
  4. Ownership passes to the customer at the end of the agreement when all payments, including the final balloon payment, have been made
  5. Alternatively the vehicle can be returned for resale by the funder, with no further payments due
  6. The vehicle appears as a balance sheet asset for the duration of the contract
  7. Unlike Contract Hire, VAT is not recoverable on the monthly payments