Finance

  • A Hiring Agreement where the vehicle remains the property of the Finance Company.
  • The vehicle is disposed of by the Finance Company at the end of the contract.
  • The contract hire period is usually set between 2 and 4 years.
  • The contract is for a set mileage usually a maximum of 100,000 petrol engines and 120,000 diesel engines.

The customer pays for a fixed monthly rental for contract hire which will always include:

  • a) Cost of vehicle funding.
  • b) Cost of vehicle depreciation.
  • c) Road Fund License.

For an additional Rental the customer can include the following options to a contract hire package:-

  • a) All Maintenance, Service, Repairs, Tyres and Batteries.*
  • b) Relief Vehicle provision.
  • c) Recovery service.

*Accidental damage, driver abuse and glass breakage's are normally excluded.

Advantages

  • 1. Fixed cost motoring:- The Customer only has to bear the direct costs for fuel and vehicle insurance, plus Excess Mileage charges if the vehicle exceeds the Terminal Mileage figure.
  • 2. Reduced Administration.
  • 3. No responsibility for vehicle disposal on contract hire.
  • 4. Low initial outlay.
  • 5. Low monthly outlay.
  • 6. Finance charged on VAT exclusive price of new and qualifying cars.

Disadvantages

  • 1. No equity on the vehicle at the end of the contract hire.
  • 2. VAT on rentals only 50% of which is reclaimable.
  • 3. Vehicles do not appear on the balance sheet.
  • A Funding Agreement where the title to the vehicle passes to the customer when all payments and fees have been made.
  • Agreements are often constructed with a deferred payment (Balloon) equating to the anticipated value of the vehicle at the end of the agreement and this allows both low initial and monthly payments.
  • The customer is responsible for depreciation, maintenance costs and all risks of ownership.

Advantages

  • 1. Customer gains ownership of the vehicle.
  • 2. Vehicle appears on company balance sheet.
  • 3. Customer has equity in vehicle to pay deposit on next vehicle.
  • 4. Customer claims writing down allowance.
  • 5. No VAT on monthly payments.

Disadvantages

  • 1. Higher initial outlay.
  • 2. Higher monthly cost.
  • 3. VAT not reclaimable.
  • 4. Customer bears risk of depreciation of vehicle.
  • A Hiring Agreement where the vehicle remains the property of the Finance Company.
  • The Hirer is responsible for Residual Value (Balloon Rental).
  • The Hirer is responsible for all maintenance and Road Fund Licence.
  • Title in the Vehicle can never pass to the hirer.
  • On disposal of the vehicle, to a third party, the Finance Company will refund to the hirer a percentage of the sales proceeds after deducting the Balloon repayment.

Advantages

  • 1. Low initial outlay.
  • 2. Low monthly outlay. Hirer only pays for depreciation and finance charges during the course of lease.
  • 3. Finance charged on VAT exclusive price of new and qualifying cars.

Disadvantages

  • 1. No or reduced equity in the vehicle at the end of the contract.
  • 2. VAT on rentals only 50% of which is reclaimable.
  • 3. Vehicles appear on balance sheet as per SSAP 21.
  • 4. Hire takes risk of any loss on the sale of the vehicle.
  • 5. Pay interest on outstanding Balloon payment.
  • A Funding Agreement where title to the vehicle passes to the customer when all payments and fees have been payed.
  • Agreements are constructed with a deferred payment equating to the anticipated value of the vehicle at the end of the agreement.
  • The vehicle can be returned to the Finance Company at the end of the contact.
  • The contract is set for a period usually between 2 and 4 years.
  • The contract is for a set mileage usually a maximum mileage of 100,000 for petrol engines.

The customer pays a fixed monthly rental which will always include:

  • a) Cost of vehicle funding.
  • b) Cost of vehicle depreciation.
  • c) Road Fund License.

For an optional maintenance rental* the customer can include the any or all or the following:

  • a) All Maintenance, Service, Repairs, Tyres and Batteries.
  • b) Relief Vehicle provision.
  • c) Recovery service.

*Note: VAT is not applied to monthly payments but IS due on any maintenance rental.

Advantages

  • 1. Low initial Outlay.
  • 2. Low monthly cost.
  • 3. No risk for depreciation.
  • 4. No VAT on finance repayment.
  • 5. Option to own vehicle.
  • 6. Vehicle appears on balance sheet.
  • 7. Fixed cost motoring.

Disadvantages

  • 1. No or reduced equity on vehicle.
  • 2. VAT on new or qualifying vehicles not reclaimable.
  • 3. VAT on Maintenance element of Repayment.
  • A Hiring Agreement where the vehicle remains the property of the Finance Company.
  • The vehicle is disposed of by the Finance Company at the end of the contract.
  • The contract is set for a period usually between 2 and 4 years.
  • The contract is set for mileage usually for a maximum of 100,000 petrol engines and 120,000 diesel engines.

The customer pays a fixed monthly rental which will always include:

  • a) Cost of vehicle funding.
  • b) Cost of vehicle depreciation.
  • c) Road Fund License.

For an additional Rental the customer can include the following options:-

  • a) All Maintenance, Service, Repairs, Tyres and Batteries*.
  • b) Relief Vehicle provision.
  • c) Recovery service.
  • *Accidental damage, driver abuse and glass breakage's are normally excluded.

    Advantages

    • 1. Fixed cost motoring:- The Customer only has to bear the direct costs for fuel and vehicle insurance, plus Excess Mileage charges if the vehicle exceeds the Terminal Mileage figure.
    • 2. Reduced Administration.
    • 3. No responsibility for vehicle disposal.
    • 4. Low initial outlay.
    • 5. Low monthly outlay.
    • 6. Finance charged on VAT exclusive price of new and qualifying cars.

    Disadvantages

    • 1. No equity on the vehicle at the end of the contract.
    • 2. VAT on rentals only 50% of which is reclaimable.
    • 3. Vehicles do not appear on the balance sheet.
Personal Details
Employment Details
Previous Employment Details
Vehicle Details
£
£