Finance Methods

Select from one of the below finance methods for more information:

• Contract hire
• Finance lease
• Contract purchase
• Lease purchase
• Sale and leaseback
• Personal contract hire
• Personal contract purchase
• Hire purchase
• Car taxation

Contract hire

The most popular choice for VAT – registered and non VAT – registered companies that want minimum outlay and maximum control of costs, especially when the maintenance and relief vehicle options are included. With this VAT – beneficial financing package, one regular rental payment covers all risks, including costs of depreciation and disposal, for an agreed period of time and mileage. Road Fund Licence is included, but roadside rescue, maintenance and relief vehicle provision are options that can be added and changed to the monthly rental.

The benefits of Contract Hire:

• Up to 100% tax deductable depending on cost of vehicle
• Low initial outlay
• Flexible contracts
• No residual risk
• No disposal issues
• Optional relief vehicle whilst yours is off the road
• Capital not tied up in a depreciating asset
• Off-balance sheet borrowing/accounting
• Fixed cost and optional maintenance
• VAT on rentals reclaimable
• Road fund licence included for the full contract length

Finance lease

Ideal for VAT – registered companies who want to handle the administration of their vehicles, and have the asset shown on their balance sheet. A VAT – beneficial option where the hirer can choose to pay the entire cost over the agreed lease period, plus an interest charge, or pay lower monthly rentals during the lease period with a final payment based on the anticipated resale value of the vehicle.

The benefits of Finance Lease:

• Ownership at the end of the contract
• Fixed monthly costs
• Flexible contracts
• Low initial outlay
• Business capital not tied up in a depreciating asset
• VAT on rentals reclaimable
• Road fund licence included for the full contract length

Contract purchase

For companies with high-value cars who would like the option to purchase the vehicles, but don’t want any depreciation risks. The customer acquires the vehicle by paying fixed monthly instalments with the asset being shown on the company balance sheet, and can either retain ownership at the end of the contract or hand the vehicle back.

The benefits of Contract Purchase:

• Low initial outlay
• Eventual ownership
• No residual risk
• Interest charges claimable against tax
• More capital to invest in your business
• Flexible contract
• Optional final payment
• Rentals allowable against tax
• Writing down allowance
• Fixed monthly costs
• No disposal problem
• Optional maintenance package
• Optional relief vehicle
• Road fund licence included for the full contract length

Lease purchase

For non-VAT – registered companies that want eventual ownership of the vehicle. A funding agreement where the company acquires ownership when all payments, including the purchase payment have been made. Part of the capital cost of the vehicle payment may be deferred into a Balloon Payment at the end of the agreement, which equates to the anticipated market value of the vehicle at the end of the agreed leasing period.

The benefits of Lease Purchase:

• Fixed monthly cost
• Ownership at the end of the lease
• Flexible contract
• Balloon Payment
• Low initial outlay
• Business capital not tied up in a depreciating asset
• Finance not subject to VAT
• Interest reclaimable against tax
• Writing down allowance
• Road fund licence included for the full contract length

Sale and leaseback

For companies wishing to retain the use of their vehicles, yet generate capital from their sale, whilst transferring to a VAT – beneficial funding method. If a company currently owns its vehicles, this option means the finance company will purchase the vehicles for an agreed price and lease them back using either Contract Hire or Finance Lease, according to customer preference. Turning company cars into company cash!

The benefits of Sale and Leaseback:

• Road fund licence included for the full contract length
• Release the equity tied up in your existing fleet
• Negate the residual risk
• Moves the fleet off the balance sheet

Personal contract hire

Personal Contract Hire delivers all the benefits of a company car to the private individual. Personal Contract hire gives the user a fixed monthly rental for a fixed contract term. At the end of the contract term you hand the car back to the finance company, no need to sell the vehicle privately or worry about its value.

The benefits of Personal Contract Hire:

• Low initial outlay
• Flexible deposit
• Choice of rental period
• No final payment
• Fixed monthly rentals
• Optional maintenance contract
• No disposal problems
• Optional relief vehicle
• Road fund licence included for the full contract length
• No residual risk

Personal contract purchase

For private individuals who want a hassle free and cost effective way to finance and maintain a vehicle. Consultation and assessment of your requirements may reveal that personal leasing is the ideal financing solution for your business and personal needs. The finance company allows you to enjoy significant tax advantages and a choice of a new or nearly new vehicle every two or three years in return for a fixed monthly charge that is easy to budget for, as well as an all-inclusive (optional) maintenance and breakdown package.

The Benefits of Personal Contract Purchase:

• Road fund licence included for the full contract length
• Optional ownership
• Optional relief vehicle
• Optional final payment
• Low initial outlay
• Flexible deposits
• Fixed monthly payments
• Optional maintenance contract

Hire purchase

You enter into an agreement over a fixed period at a fixed instalment. Upon payment of the final instalment the vehicle becomes yours. A balloon payment can be incorporated as can low deposits.

The Benefits of Hire Purchase:

• An alternative funding line to bank overdrafts.
• Ownership at the end of the contract
• Low initial outlay
• Flexible contract
• Interest reclaimable against tax
• Writing down allowance
• Balloon Payment
• Fixed monthly cost
• Business capital not tied up in a depreciating asset
• Road fund licence included for the full contract length

Car taxation

CO2 emissions (grams per kilometre)

* add 1 per cent if car solely runs on diesel
** add 2 per cent if car solely runs on diesel
*** add 3 per cent if car solely runs on diesel
**** maximum charge so no diesel supplement