Car leasing is currently the biggest growing finance product in the motor industry. Also referred to as Contract Hire, car and van leasing is simply a long-term rental agreement for a vehicle. It benefits by providing a cost-effective way to fund any number of vehicles, whether for a business or private individual.
Once exclusive to businesses, in recent years leasing companies and fleet departments have opened their facilities for everyone to enjoy. This allows private individuals to take advantage of discounts once only available to businesses.
Leasing is a flexible product. Standard contracts range from 24 to 48 months and can be tailored to individual’s requirements and annual mileage expectations. As a rule, the more miles you do, the higher the monthly rental will be.
Each quotation and contract is tailored to the individuals needs, so the length of the contract, the annual mileage and even what initial payment to put down. You can also choose any new car or van to suit your budget.
As everyone knows, a new car or van depreciates greatly. Leasing a new car or van allows you to drive a brand-new car and try something new every 2 to 4 years, without the risk of depreciation or haggling for a discount or higher part exchange figure yourself in a showroom. It’s that simple.
Contract Hire is by far the most popular type of leasing product, being the ideal product if you want fixed cost motoring over a set period of time. It is an easy and cost effective way of funding vehicles, enabling you to control one of your biggest and sometimes underestimated business expenses.
The vehicle is hired for a set period of time with an agreed contract mileage for a fixed monthly payment. At the end of the contract the finance company will collect and dispose of the vehicle leaving you with no depreciation or disposal worries.
You can include total vehicle maintenance in your monthly rentals, covering all aspects of the maintenance of the vehicle which goes way above servicing – includes tyres and punctures and all non routine maintenance outside of servicing schedules too (excludes cosmetic damage and fluids). It’s a brilliant way of having no unexpected bills so you can budget accordingly.
Contract Purchase is a finance agreement to purchase a vehicle through a series of monthly instalments, and ownership will pass to you at the end of the contract following a final payment.
Thanks to a guaranteed residual value set by the finance company at the start of the contract, you have three options at the end:
Similar to Contract Hire, Contract Purchase enables you to make fixed monthly rentals, but with the option to retain the vehicle at the end of the contract. It is ideal for customers who want ownership without a large financial outlay and who want multiple options at the end of the contract.
Business Contract Hire is a cost effective, fixed cost, fixed term rental agreement for Businesses. All contract hire agreements include road fund licence for the duration of the agreement. There is the additional option of being able to add a full maintenance contract, and a relief vehicle.
It is possible to contract hire a vehicle from 24 months up to 60 month, with annual mileage as low as 5000MPA, with a maximum mileage at the end of the contract of no more than 150000 for diesel vehicles.
The Contract Hire Company purchase the vehicle, at the best possible discount we can negotiate from the car manufacturer or dealer, and hires it to the business for a fixed rental. At the end of the contract the vehicle is returned to the contract hire company for disposal. The business has no further involvement, or responsibility provided the car is returned in good condition.
All rentals attract VAT at the prevailing rate, and subject to your current VAT status you may be able to claim 50% of the VAT back for cars, and up to 100% of the VAT back for light commercial vehicles
A contract Hire agreement can be designed to suit your businesses budget, and your vehicle usage. At the outset we will agree an initial rental as little as 1 rental in advance with alternative initial rentals of 3, 6, 9 or 12 rentals in advance. The larger the initial rental, the lower your monthly ongoing costs. Please note that all initial rentals are collected by the leasing company by direct debit 7-10 days after vehicle delivery.
We will agree an annual mileage at the outset, and subject to leasing company terms and conditions it may be possible to change the annual mileage at certain points during the contract. Our quotes will have an excess mileage stated on them, for example, if the excess mileage is £0.06 and you go over by 1000 miles it will only cost £60.
All vehicles supplied are New (or Pre-Registered), and will come with the balance of manufacturers warranty.
There is no ability for the business to purchase the vehicle
All rentals attract VAT
Early Settlement. There is no prescribed formula for early settlement, and each leasing company operate independently
Potential de-hire charges