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Types of Commercial Vehicle Finance Available:
CONTRACT HIRE
Fix the cost of your vehicles
Van Contract hire could prove ideal for your business. You can focus on core
activities, by fixing your costs and avoiding the burden and risk of owning your
own vehicles.
Contract hire benefits
- Fixed monthly payments - easier budgeting comes as
standard
- Flexible agreement terms - variable terms and mileage
available
- Vehicle maintenance option - include servicing and
maintenance in your rentals to help spread the cost
Eliminate risk of asset depreciation - at the end of the
agreement, you simply hand back the vehicle, subject to return conditions
and excess mileageFor a set monthly sum, everything except fuel and motor insurance can be
taken care of in your finance package - including servicing, tyres, even the tax
disc. At the end of the agreement, you simply hand back the vehicle. Or you
could negotiate a favourable extension to the contract.
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CONTRACT PURCHASE
The fixed cost way to buy assets
Contract purchase fixes your monthly payments and offers you flexible terms.
This type of finance gives you the opportunity to either retain or return the
vehicle at the end of the agreement.
Contract purchase benefits
- Fixed monthly payments - budgeting is easier when you
know the costs in advance
- Flexible agreement terms - variable terms and mileage
available
- Optional maintenance and added value services - can be
included in the agreement
- Guaranteed resale value - we will fix a vehicle resale
value to take effect at the end of the agreement
Full ownership at end of contract - you own the vehicles
once all payments have been madeThis finance may be preferable if you want to own your vehicles, yet avoid
the risk of depreciating assets. A guaranteed residual value helps improve your
cash flow during the agreement while making the vehicles cost effective to buy.
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FINANCE LEASE OR LEASE PURCHASE
The benefits of ownership - without the downsides
The benefits of ownership with spread fixed rentals and disposal taken care of.
Finance lease benefits
- Low up-front costs - for just a small outlay, you can use the assets
immediately
- Flexible repayment structure - rental payments can be tailored to match your
cash flow
- Fixed or variable interest options - you decide which suits you best
Tax advantages - VAT is payable on the rentals, not the purchase price,
while payments can normally be offset against taxable profit.Monthly payments can be matched to your cash flow. At the end of this commercial leasing
agreement, the relevant assets are sold and you receive the major share of the
proceeds. As the asset owner, we claim the available writing-down allowances and
reflect this in your monthly payments.
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HIRE PURCHASE
Own your asset while spreading the cost
Hire purchase - otherwise known as lease purchase - is a simple repayment facility, where you
eventually own the asset at the end of your agreement.
Hire purchase benefits
- Total control - the asset is yours at the end of the agreement
- Flexibility in your repayments - makes for easy budgeting
- Fixed or variable interest options - it's your decision which is best for
you
- Tax advantages - normally you can claim writing-down allowances and
perhaps capital grants, while repayment interest may be offset against
profits and VAT is usually reclaimable (special rules apply to cars)
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More Finance Lease Information.
A Finance Lease offers similar benefits and risks to a HP agreement. However 'title' (ownership) to the equipment remains with the finance company at all times. As the customer does not have outright ownership, no capital allowances are available. However, equipment is capitalised in the Balance Sheet, and depreciation is charged to P & L account. VAT is paid on each rental throughout the term. At the end of the Finance Lease, the customer enters into the “secondary period “whereby one month rental is is paid on an annual basis, (Peppercorn rent). Alternatively the customer sells the equipment and retains 90% of sale proceeds and accounts for balance to the finance company.
Similar to our Hire Purchase solution, with a repayment plan over 1 to 5 years, (except in certain circumstances) you can take advantage of substantial tax benefits associated with leasing. This is normally applicable when you acquire short life equipment and you decide to depreciate the equipment over a short period of time. All the Finance Lease rentals paid can be off-set against tax.
Finance leasing is a flexible, tax-efficient way for your business to acquire the assets it needs without using up cash reserves, In brief:
- Financing for up to 100% of the purchase price (exc VAT)
- VAT payable on the rentals, not the purchase of the asset
- A Finance Lease offers the option to carry on renting the asset for a nominal sum OR to sell it and retain most of the cash proceeds when the term ends
There is normally no need for additional security as the finance is usually secured on the asset, and you may realise some value at the end of the term.
How a Finance Lease works
With a Finance Lease you also get a choice of fixed or linked rate funding as well as a payment structure that can be matched to your cash flow patterns to ease budgeting. We retain ownership of the assets purchased, but you can sell them on our behalf at the end of the term and keep most of the proceeds.
Who a Finance Lease is for?
If you want to buy commercial vehicles and recover some of their value at the end of a fixed period, this could be the right business finance solution for you.
A Finance Lease can be suitable for businesses of all sizes, and all types of assets.
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