Finance options

Contract Hire

• Low initial rental
• No capital investment
• Rentals allowable against tax
• All advantages of ownership
• Budgeted transport costs
• Full maintenance
• No disposal problems
• Improved cash flow
• Minimised administration
• VAT recoverable

A popular choice for VAT registered businesses requiring minimum outlay and providing optimum user friendliness. The vehicle is hired for an agreed period of time and a fixed rental is paid based on the anticipated mileage (the higher the mileage, the higher the rental). Contracts can be hire only or include full maintenance to cover routine servicing and tyre replacement etc.

At the end of the contract the vehicle is simply returned to the finance company. Up to 100% of rentals can be offset against taxable profits and, depending on the vehicle type and nature of its use, up to 100% of the VAT on the rentals can be reclaimed

Contract Purchase

• Low initial payment
• No capital investment
• Capital allowances on full vehicle cost
• All advantages of ownership
• Budgeted transport costs
• Full maintenance
• No disposal problems
• Improved cash flow
• Minimised administration
• No VAT on finance payments

Ideal for customers who would like the option to purchase the vehicle without taking all the depreciation risk. Similar to contract hire, the customer pays a fixed monthly payment for an agreed period of time based on an anticipated mileage. Maintenance can be included as an option.

At the end of the contract the customer can pay a predetermined final payment to purchase the vehicle or simply return it to the finance company. Writing down tax allowances apply. Shown on balance sheet.

Finance Lease

• Low initial payments
• Releases capital
• Rentals allowable against tax
• All advantages of ownership
• On balance sheet asset
• VAT recoverable
• Improved cash flow

Similar to contract hire and ideal for VAT registered businesses that want to handle the administration of their vehicles.

The lessee will assume responsibility for selling the vehicle at the end of the contract (instead of it being collected by the leasing company) usually to settle a pre-agreed residual payment. The lessee can potentially profit on this sale, if the sale amount exceeds the residual payment. Shown on balance sheet.

Lease Purchase

• Low initial payments
• Releases capital
• On balance sheet asset
• Tax allowances
• Ownership
• No VAT
• Extra source of funds

Used by companies who require definite eventual ownership of the vehicle. The customer acquires the vehicle when all the payments, including an option to purchase payment, have been made. Part of the capital cost of the vehicle payment may be deferred into a 'balloon' or residual payment at the end of the agreement (Lease Purchase), which equates to the anticipated value of the vehicle at the end of the agreed loan period.

Personal Leasing

• Low deposit
• Mileage restrictions apply
• 18-60 mth contracts
• Any vehicle - new or used (up to 12 mths old)
• Breakdown cover included
• No VAT
• Extra source of funds
• Option to purchase at contract end
• Fleet buying power
• Competitive rates

For private individuals who want a hassle-free and cost effective way to finance and maintain a vehicle. The individual can choose a full maintenance or non-maintenance option.

This plan enables the private user the enjoyment of obtaining a new car, every few years, without having to buy it outright.

A residual payment is incorporated into the contract and is payable at the end of the primary contract period, should the individual wish to acquire ownership of the vehicle.

Alternatively, the vehicle can be returned to the finance company at this point.