Deciding on Vehicle Contract Hire and Lease Packages
Contract Hire is a straightforward answer for businesses to get vehicle finance.
Leasing cars and vans is a way for business's such as Partnerships, Sole Traders and Ltd Organizations to acquire automobiles without a size able initial outlay or risk from depreciation.
By following the leasing path, a company can lower cash output and therefore increase the business cash flow.
Research has established that almost 62% of all fleet registered vehicles are funded through automobile leasing, which is mounting each day as more businesses become knowledgeable of the economic benefits and advantages of this hire option.
Leasing costs are determined by the depreciation of a car over a preset term and mileage together with a set interest charge provided the consumer does not exceed the mileage or cause any breakages to the car.
Maintenance Options for example can be added to the contract hire deal together with accident management. Choosing these extras can be used to create a more comprehensive package which suits some business's who wish to save admin time for other things..
This makes it possible for easy budgeting for forward business planning with predetermined hire costs. The only additional variables are the expenses for fuel and insurance when a full package is undertaken.
Whether it is a business or personal contract that is required, there are numerous choices available. These are contract hire, personal contract hire, finance lease or personal contract purchase.
Since 1995 the new VAT laws make leasing a more appealing way for organizations to lease their automobiles since leasing businesses can claim back all the VAT on a qualifying vehicle, as a result the finance element of the vehicle lease is calculated on the price of the car less the VAT, not the show room price, saving your company money and by paying for your automobile by means of our reduced fleet terms we can save you even more money.
Also if your organization is VAT registered you can also claim back up to 50% of the VAT charged on the funding of the vehicle and up to 100% the VAT charged on the maintenance applicable when the vehicle is for partnership use. If you are a VAT registered organization then a percentage of the VAT can be reclaimed back off the monthly leasing repayments.
For vans/commercial vehicles used exclusively for company purposes the hirer may claim 100% of the VAT on both the funding and the maintenance.
As an alternative company Directors may find they are financially better off by paying themselves a car allowance and opting for Personal Contract due to the benefit in kind CO2 tax laws.
At the closure of the agreement the vehicle is returned to the funding provider When a contract hire finishes the automobile is normally collected by the funding company.
However, if the business needs a lease extension whilst awaiting the factory order of their next vehicle this can often be organized easing the transition between vehicles with the least amount of fuss.
This can minimize your business's car administration to just choosing the vehicle and leaving you only with paying for fuel, oil and insurance.
Author Resource:
By Stuart Watt . For car leasing news or to arrange contract hire , go to 1st4contracthire.co.uk
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