Vehicle Financing
Our Corporate Sales team offers a range of finance solutions to meet the needs of all sizes and types of businesses, from SMEs with flexible requirements to companies running large fleets of company cars.
Contract Hire
Contract Hire provides a cost-efficient method of financing and maintaining company cars, avoiding the worry associated with depreciation, maintenance and disposal. Contract Hire is based on fixed periods of hire and mileage with the option of a maintenance package. The risks of asset ownership are transferred to the finance provider, while the removal of capital assets from the balance sheet releases capital and may enhance cash flow and borrowing ratios.
Another benefit is that VAT is fully recoverable on lease rentals, providing that the car is used entirely for business purposes. Where there is an element of private use, recoverable VAT is reduced to 50% of the finance rental cost. In either case, VAT on maintenance charges is fully recoverable.
In addition, a significant lowering of overheads is achieved through a reduction in administration expenditure, while fixed monthly and annual costs help with budgeting.
Finance Lease
Finance Lease allows businesses to benefit from the VAT advantages of leasing while retaining the potential profits generated by vehicle sales. Businesss benefit from a low initial payment and fixed rates of interest and the assets remains on the balance sheet. Finance Lease has VAT and corporation tax benefits similar to those of Contract Hire, while the risk and responsibility for resale at the end of the term remain with the business.
Contract Purchase
Contract Purchase is suitable for companies who are unable to reclaim VAT and business who run higher value vehicles as part of their fleet. It offers many of the administrative advantages of Contract Hire, including a significant lowering of overheads through a reduction in administration expenditure with fixed payments which help with budgeting and the flexibility to keep the end of agreement options open.
With Contract Purchase, businesses enter into a financial agreement for a pre-determined period at a fixed monthly rate, with payments calculated to take into account the cost of the car, its rate of depreciation, the estimated mileage, the length of the contract and additional services. At the end of the term, there is the option to buy the vehicle by making a final balloon payment or simply return the car at no further cost.
Hire Purchase
This is a simple and straightforward way to spread the cost of purchasing a vehicle over an agreed period of time, with a choice of a variable or fixed interest rate.
Lease Purchase
Lease Purchase offers businesses the simplicity of Hire Purchase, but with reduced regular fixed payments and a larger final payment. This funding option is tax-efficient as a proportion of the car's value can be written down against profits and the interest paid is allowable against tax.
Sale and Leaseback
Sale and Leaseback offers a convenient and efficient funding option for effecting the transfer from outright purchase to leasing, as the finance provider purchases the fleet and leases it back to the business.
Alternative Car Schemes
The Corporate Sales team can advise on alternative car schemes, including Employee Car Ownership Plan (ECOP) and All Employee Car Ownership Plan (ACOP), which can suit companies requiring a flexible alternative to a traditional company car scheme. Available either as Personal Car Plans (PCPs) or as Employee Car Ownership Schemes (ECOS), packages range from standard options to bespoke solutions, tailored to meet the needs of individual businesses. Businesses can choose to target drivers directly or extend the availability to the wider employee population in the form of an affinity scheme.
PCPs offer affordable car finance schemes for employees and family members, allowing individual employees to drive new cars at competitive prices, with monthly payments that are lower than traditional finance arrangements.
With ECOS, the employer retains control of fleet policy, while employees benefit from vehicle and maintenance repayments that are funded through a combination of tax savings, tax-free business mileage reimbursements and top-up cash allowances.
