Business contract hire is particularly popular with VAT registered companies as at least 50% of the VAT can be reclaimed on every payment and funding can be kept off the balance sheet.
Business contract hire otherwise known as business car leasing enables you to release the capital you would have spent on the outright purchase of a vehicle into your business and allows you to opt for a low deposit and the option to have an all inclusive monthly rental.
Business contract hire gives you the peace of mind that at the end of the agreement you simply hand back the vehicle and take out a new one.
Basically the user takes no risks in ownership and has set monthly costs, and effectively pays just for the use of the vehicle.
Benefits of Business Contract Hire
- Minimum capital expenditure
- Fixed monthly costs
- No problem of vehicle disposal
- Any make or model of vehicle
- Road fund licence included for the duration of the contract
- Option to include full maintenance and servicing
- Optional replacement vehicle cover in event of breakdown
- Off balance sheet
- VAT recoverable on monthly rentals (50% if car has private usage. 100% if business only)
- No risk of depreciation
This is a viable alternative to business contract hire and is suitable for VAT registered companies that wish to handle the administration of their vehicles, and have the asset shown on their balance sheet.
This VAT beneficial option allows the hirer to choose to pay the entire cost over the hire period including interest charges, or pay lower rentals during the lease period with a final payment based upon an anticipated resale value of the vehicle.
Benefits of Finance Lease
- Low initial payment
- Option of final balloon payment
- Fixed cost motoring
- VAT recoverable on rentals (as per contract hire)
- Fixed interest rates
This is for non-VAT registered companies that want eventual ownership of their vehicles or for VAT registered companies who wish to claim the VAT in full with their first payment on a commercial vehicle.
These agreements allow for the company to acquire ownership when all payments, including the optional balloon payment, have been made. The disposal and residual value risks remain with you.
Benefits of Lease Purchase
- Low deposit
- Improved cash flow
- Capital allowances available
- Allows ownership of the vehicle
Call today on 0845 678 1112 for a quotation on any make or model and to hear our latest special offers. For your next car on finance, talk to UK Car Contracts today.