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Finance
Leasing
can be one of the most cost effective options if you need full use of a
vehicle for minimum outlay but do not require final ownership.
CASHFLOW BENEFITS
By leasing your vehicles through us valuable savings can be made. A
Finance Lease can be extremely flexible. Rentals can be paid monthly,
quarterly or annually throughout the lease period (usually 2 to 5 years).
The initial deposit is normally expressed as monthly rentals in advance and
a final lump sum balloon payment (sometimes called a residual value) is
usually included. This has the effect of reducing the amount of the monthly
rental, thereby aiding cashflow.
TAX IMPLICATIONS
The rentals can be offset against taxable profits. If you are VAT
registered, 100% of the VAT payable on the rentals can be reclaimed for any
commercial vehicle or car used exclusively for business purposes. 50% of the
VAT can be reclaimed for a car used for both business and private mileage.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT?
At the end of the lease the vehicle is sold and the sale proceeds (less a
nominal sum) are refunded to you as a rebate of rentals, which attract VAT.
Due to its low initial outlay, fixed costs throughout the rental period,
excellent tax efficiency and flexibility, Finance Lease is favoured by many
business users.
Lease
Purchase
is similar to hire purchase but has greater flexibility.
CASHFLOW BENEFITS
The initial deposit is normally expressed as monthly payments in advance and
is much lower than traditional HP, and a final lump sum or balloon payment
(sometimes called a residual value) is usually included. This has the effect
of reducing the amount of the monthly payments, thereby aiding cashflow.
TAX IMPLICATIONS
The tax and financial benefits are the same as hire purchase, but the
payments can be structured to suit a businesses particular cashflow needs.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT?
After making the balloon payment, ownership of the vehicle can be taken, or
it can be part exchanged - using any surplus equity towards a deposit for a
new vehicle.
Contract Purchase
option is similar to Lease Purchase
but with even greater flexibility. It is designed to give all the
operational benefits of Contract Hire including maintenance, Road Fund
Licence and relief vehicle, without the VAT implications of a lease. It
therefore appeals to professions and businesses that are not VAT registered,
and individuals who wish to opt out of their company car scheme.
CASHFLOW BENEFITS
The initial deposit is normally
expressed as monthly payments in advance and is followed by fixed monthly
payments, you know exactly what your monthly motoring costs will be.
TAX IMPLICATIONS
The tax and financial benefits are the
same as Lease Purchase or Hire Purchase.
WHO OWNS THE VEHICLE AT THE END OF THE
AGREEMENT?
The final balloon payment is a
Guaranteed Future Value. You have the option of either taking ownership,
disposing of the vehicle yourself (if you wish to take advantage of a profit
opportunity) or simply returning the vehicle to
the finance company.
Contract
Hire
is an Operating Lease without maintenance or servicing. It is a simple and
straightforward facility that can offer some businesses an efficient package
that lets you retain control of your own vehicle servicing and maintenance.
CASHFLOW BENEFITS
A vehicle on an Operating Lease can be classified as "off balance sheet" for
accounting purposes, therefore offering advantages to your business by
improving its financial ratios (gearing).
TAX IMPLICATIONS
As it is an Operating Lease your finance rentals can be offset against
taxable profits. If you are VAT registered, you can reclaim 50% of the VAT
on the finance element of the rentals if the vehicle is used privately, or
100% if it is used exclusively for business or is a commercial vehicle.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT?
After you have paid your regular fixed monthly rentals for the fixed period,
at the end of the agreement you simply hand the vehicle back.
Personal
Contract Hire (PCH)
is a new
product for private individuals leaving a company car scheme or joining a
new company that provides a car allowance, instead of a company car. It
allows you the opportunity to finance a car using the most popular funding
method used by companies.
PCH
is
available with or without a maintenance package (the maintenance package
offering fixed cost motoring with no hidden extras) and is available for new
cars or used vehicles up to 15 months old.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT?
You use the car for the designated period and at the end of the term the
vehicle must be returned to the finance company and you start a new
agreement with the vehicle of your choice.
PCH
rates are exactly the same as quoted contract hire rates simply add 17.5% to
the monthly rate (as VAT is not reclaimable for PCH) and PCH is available on
all UK supplied cars but is not available on any "Grey Imports".
Personal
Contract Purchase (PCP)
is a new product developed to enable individuals to finance their vehicle
whilst still retaining some or all of the benefits associated with a company
car.
As the agreement is written in your name the normal "benefit in kind tax
liability" doesn't apply. This facility can also be offered to those
employees not normally entitled to a company car. Low deposit followed by a
fixed monthly charge means that is easy to budget for and it is possible to
provide all-inclusive maintenance and breakdown packages.
WHO OWNS THE VEHICLE AT THE END OF THE AGREEMENT?
The vehicle is supplied for a set period of time at a fixed rental. At the
end of the agreement the driver may purchase the vehicle by paying the
balloon payment (guaranteed future value) or simply return it to the finance
company.
Cash Purchase
of your vehicle is always an option either through existing savings or
raising the cash via Personal HomeOwner Loan or Remortgaging to release some
of your equity. Our
sister company caters for this option
should you be looking to raise finance for vehicle purchase as well as other
home improvement finance requirements..
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