Hire Purchase

Hire Purchase is a simple and popular way of purchasing a vehicle, with worthwhile tax advantages for businesses. If ownership is a priority, this is an extremely cost effective method of borrowing.

Cashflow Benefits
Paying an initial deposit, calculated as a percentage of the total cost this is followed by fixed monthly repayments; which allows you to budget monthly expenditure precisely in advance.
Tax Implications
Business users may claim tax relief on the interest charged. The vehicle is also classified as an asset, which allows it to be written down against taxable profits by 25% or £3000 (maximum per annum).
Who Owns the Vehicle at the End of the Agreement?
At the end of the agreement, which may be from 1 to 5 years, you become the outright owner of the vehicle.

Personal Contract Purchase

Personal Contract Purchase (PCP) is a new product developed to enable individuals to finance their vehicle whilst still retaining some or all of the benefits associated with a company van.

As the agreement is written in your name the normal "benefit in kind tax liability" doesn't apply. This facility can also be offered to those employees not normally entitled to a company van. Low deposit followed by a fixed monthly charge means that is easy to budget for and it is possible to provide all-inclusive maintenance and breakdown packages.

Who Owns the Vehicle at the End of the Agreement?
The vehicle is supplied for a set period of time at a fixed rental. At the end of the agreement the driver may purchase the vehicle by paying the balloon payment (guaranteed future value) or simply return it to the finance company.

Contract Hire with Maintenance

This is a simple Operating Lease that includes full maintenance, servicing and road fund licence. It provides a complete fixed cost motoring package, leaving you free to concentrate on running your business.

Cashflow Benefits
With a low initial outlay, normally expressed as monthly rentals in advance, followed by fixed monthly payments, you know exactly what your monthly motoring costs will be. Contract Hire may also be classified as "off balance sheet" which may improve the financial ratios in your accounts (gearing).
Tax Implications
As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle. What's more, all the VAT on the maintenance element of the rental can be recovered, irrespective of vehicle use.
Who Owns the Vehicle at the End of the Agreement?
As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle. What's more, all the VAT on the maintenance element of the rental can be recovered, irrespective of vehicle use.

Contact Hire Without Maintenance

This is an Operating Lease without maintenance or servicing. It is a simple and straightforward facility that can offer some businesses an efficient package that lets you retain control of your own vehicle servicing and maintenance.

Cashflow Benefits
A vehicle on an Operating Lease can be classified as "off balance sheet" for accounting purposes, therefore offering advantages to your business by improving its financial ratios (gearing).
Tax Implications
As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle.
Who Owns the Vehicle at the End of the Agreement?
After you have paid your regular fixed monthly rentals for the fixed period, at the end of the agreement you simply hand the vehicle back.

Contract Purchase

This option is similar to Lease Purchase but with even greater flexibility. It is designed to give all the operational benefits of Contract Hire including maintenance, Road Fund Licence and relief vehicle, without the VAT implications of a lease. It therefore appeals to professions and businesses that are not VAT registered, and individuals who wish to opt out of their company van scheme.

Cashflow Benefits
The initial deposit is normally expressed as monthly payments in advance and is followed by fixed monthly payments; you know exactly what your monthly motoring costs will be.
Tax Implications
The tax and financial benefits are the same as Lease Purchase or Hire Purchase.
Who Owns the Vehicle at the End of the Agreement?
The final balloon payment is a Guaranteed Future Value. You have the option of either taking ownership, disposing of the vehicle yourself (if you wish to take advantage of a profit opportunity) or simply returning the vehicle to the finance company.

Finance Lease

This option is similar to Lease Purchase but with even greater flexibility. It is designed to give all the operational benefits of Contract Hire including maintenance, Road Fund Licence and relief vehicle, without the VAT implications of a lease. It therefore appeals to professions and businesses that are not VAT registered, and individuals who wish to opt out of their company van scheme.

Cashflow Benefits
Finance Leasing can be one of the most cost effective options, if you need full use of a vehicle for minimum outlay but do not require final ownership.
Tax Implications
The rentals can be offset against taxable profits. If you are VAT registered, 100% of the VAT payable on the rentals can be reclaimed for any commercial vehicle or van used exclusively for business purposes. 50% of the VAT can be reclaimed for a van used for both business and private mileage.
Who Owns the Vehicle at the End of the Agreement?
At the end of the lease the vehicle is sold and the sale proceeds (less a nominal sum) are refunded to you as a rebate of rentals, which attract VAT. Due to its low initial outlay, fixed costs throughout the rental period, excellent tax efficiency and flexibility, Finance Lease is favoured by many business users.

Lease Purchase

This is similar to Hire Purchase but has greater flexibility.

Cashflow Benefits
The initial deposit is normally expressed as monthly payments in advance and is much lower than traditional HP, and a final lump sum or balloon payment (sometimes called a residual value) is usually included. This has the effect of reducing the amount of the monthly payments, thereby aiding cashflow.
Tax Implications
The tax and financial benefits are the same as hire purchase, but the payments can be structured to suit a businesses particular cashflow needs.
Who Owns the Vehicle at the End of the Agreement?
After making the balloon payment, ownership of the vehicle can be taken, or it can be part exchanged - using any surplus equity towards a deposit for a new vehicle.

Personal Contract Hire

Personal Contract Hire (PCH) is a new product for private individuals leaving a company van scheme or joining a new company that provides a van allowance, instead of a company van. It allows you the opportunity to finance a van using the most popular funding method used by companies.

PCH is available with or without a maintenance package (the maintenance package offering fixed cost motoring with no hidden extras) and is available for new vans or used vehicles up to 15 months old.

Who Owns the Vehicle at the End of the Agreement?
You use the van for the designated period and at the end of the term the vehicle must be returned to the finance company and you start a new agreement with the vehicle of your choice. PCH rates are exactly the same as quoted contract hire rates simply add 17.5% to the monthly rate (as VAT is not reclaimable for PCH) and PCH is available on all UK supplied vans.

Please find below a selection our finance options which are available for quote on an individual basis