Motor Vehicle Leasing and Contract Hire are shrewd ways to manage your motoring expenses. When a private individual or a company purchases a car or van they pay the full price to run that vehicle whose value is inevitably constantly depreciating. In order to get the best value from your initial outlay, you must run that vehicle for its full lifespan. That means driving around in an outdated vehicle with ever increasing maintenance costs and decreasing appeal.

CONTRACT HIRE

There are two variants of contract hire, one which applies to private individuals and one which applies to businesses:

BUSINESS CONTRACT HIRE

This is an excellent scheme for companies whose emphasis is on cost control. One regular and VAT efficient payment
will cover the majority of motoring costs such as; Road Fund Licence, vehicle depreciation and the eventual vehicle disposal. Many of our clients also choose to include a maintenance package that’s specifically designed to suit them.
The only remaining motoring costs are fully comprehensive insurance & fuel.

Business Contract Hire benefits in a nutshell:

• Any make or model of vehicle
• Fixed monthly costs
• Minimum capital expenditure
• No vehicle disposal
• No depreciation
• Not recorded on Balance sheet
• VAT recoverable on a monthly rentals (50% if car has private usage, 100% if for Business use only)

PERSONAL CONTRACT HIRE

Personal Contract Hire, as its name suggests, is in essence the same as Business Contract Hire and offers similar benefits to the private individual. If you require low fixed cost motoring, or have opted out of your company car scheme then Personal Contract Hire could provide you with trouble free motoring without the depreciation that is associated with motor vehicle ownership. The VAT charge is incorporated into the monthly payment scheme, but unfortunately is not reclaimable for private individuals. Maintenance packages are usually available so that you don't get any unpleasant surprises.

Personal Contract Hire benefits are:

• Allows you to hire new or used vehicles
• Includes a full term Road Fund Licence
• Can include a full maintenance package that takes all the worry out of motoring.
  

FINANCE LEASING

These are a viable alternative to Contract Hire and is most suited for VAT registered companies that wish to handle the administration of their vehicles and wish to have this asset recorded on their balance sheets. This option is also VAT efficient and allows the leaser to choose to pay the entire cost over the lease period including interest charges, or lower the rental payments during the lease period with a final payment based upon an anticipated resale value of the vehicle.

Finance Lease Benefits in a nutshell:

• Fixed cost motoring
• Fixed interest rates
• Low initial payment
• Option of final balloon payment
• VAT recoverable on rentals (50% if car has private usage, 100% if for Business use only)
  

PERSONAL CONTRACT PURCHASE/BUSINESS CONTRACT PURCHASE

Personal Contract Purchase is for clients who want to have the option to own the vehicle at the end of the contract and who require expense control.
It is a superb option for those who have opted out of a company car scheme or for non-VAT registered companies. This is a variation on lease purchase where the ‘balloon’ or deferred payment is agreed and guaranteed.

Personal Contract Purchase means:

• A low deposit
• Payments that can be reduced by a deferred ‘balloon’ payment
• An option to own the vehicle at the end of the contract
• No disposal or unexpected ‘balloon’ payment risks
• The option to refinance the balloon payment at the end of the contract
  

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