COMMON FINANCE OPTIONS EXPLAINED
Contract Hire
A popular choice for VAT registered companies who require
minimum outlay and maximum control of costs. One regular
rental payment covers all risks including depreciation and
disposal for an agreed period of time and mileage. Road
fund licence is included for the term with maintenance cover
being optional.
Contract Purchase
For non-Vat registered companies and for those with high
value vehicles, who would like the option to purchase the
vehicle, but don't want the depreciation risk. 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. Road Fund License is included
for the term with maintenance being optional.
Finance Lease
Ideal for VAT registered companies who want to handle the
administration of their vehicles with the asset shown on
their balance sheet. The hirer can choose to pay the entire
cost over the agreed lease period, or pay lower monthly
rentals with a deferred final payment based on the anticipated
resale value of the vehicle.
Lease Purchase
A funding agreement suitable for both business and private
users who wish to acquire ownership once all payments have
been made. Part of the capital cost of the vehicle may be
deferred into a "balloon" payment at the end of
the agreement, which is based on the estimated future value,
thus reducing the monthly payment. The balloon payment must
be met by either the sale proceeds of the vehicle, or a
lump sum payment.
Sale & 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. The vehicles are purchased
by the leasing company at an agreed price and leased back
using either Contract Hire or Finance Lease.
Personal
Contract purchase
For private individuals who want hassle-free
and a cost-effective way to finance vehicles. Personal contract
purchase allows you the choice of a new vehicle every 2
or 3 years in return for a fixed monthly charge which is
easy to budget for, as well as optional maintenance and
breakdown packages with a final option to purchase the vehicle
should you require.
