Contract Hire: A fixed term agreement based upon a predetermined annual mileage, Contract Hire removes the risk of depreciation and regularizes cash flow with a fixed monthly payment including road fund licence. Additional services can be arranged to include vehicle servicing and maintenance, tyres and exhaust replacements, breakdown assistance, and relief vehicle facility. The ability of the Funder to reclaim all of the VAT on the purchase price in turn, reduces the monthly payment in comparison with a purchase plan. Benefits of Contract Hire:-

1. The rentals are tax deductible

2. Initial payment requirements are generally low

3. Pre-determined costs and fixed terms smooth out cash flow

4. Accurate budgeting with minimal administration

5. Contract Hire can include maintenance and vehicle servicing

6. No purchasing or disposal hassles

7. No risks of depreciation

8. The contract car hire company is able to reclaim all the VAT of the purchase price of the vehicles, which is reflected in much lower overall costs

 

Contract Purchase: utilizes the future value of a vehicle to reduce monthly costs. This value is guaranteed based upon an agreed predetermined annual mileage and allows an option to either purchase the vehicle for this price or simply return it to the contract Funder with no extra cost (subject to mileage and/ or condition). Service and maintenance facilities can also be included where required with car contract purchase agreements. It is also a fixed term agreement based upon a predetermined annual mileage, removes the risk of depreciation, and has a fixed monthly payment. Benefits of Contract Purchase:-

1. Initial payment requirements are generally low

2. Pre-determined costs and fixed terms smooth out  cash flow

3. Payments can include maintenance and vehicle servicing

4. No purchasing or disposal hassles

5. No risks of depreciation

6. Accurate budgeting with minimal administration

 

Finance Lease: A contract based upon a pre-agreed period to simply finance the acquisition of a vehicle. No mileage restrictions. The capital cost is spread over the term and typically incorporates a final payment based upon the predicted resale value determined by the anticipated annual mileage. VAT on the original purchase price is reclaimed by the Funder, which allows the monthly costs to be reduced to reflect the VAT saving. Finance Leases can be terminated early and allow greater flexibility although depreciation risk remains with you. The vehicle is sold to a third party at contract termination and provides the opportunity for you to benefit from any available equity. Benefits of Finance Lease:-

1. No mileage restrictions.

2. The leasing company is able to reclaim all the VAT on the purchase price of the vehicles, which is reflected in much lower monthly payments to the customer

3. Fixed monthly payments for the duration of the contract help planning ahead

4. Initial payment requirements are generally low

5. The rentals are tax deductible

6. A residual value can be included in the lease thereby reducing the monthly payments and helping cash-flow

 

Personal Contract Hire: Contract Hire for the private individual rather than the business. no option to purchase at termination, you simply hand the vehicle back. Again, service and maintenance facilities are available. removes the risk of depreciation and no disposal hassles at the end. Benefits of Personal Contract Hire:-

1. Initial payment requirements are generally low

2. Pre-determined costs smooth out  cash flow

3. Rentals can include maintenance and Service Packages

4. No purchasing, disposal hassles or risks

5. No depreciation risks  

 

Personal Contract Purchase: Contract Purchase for the private individual rather than the business. Designed for the consumer, PCP utilizes the future value of a vehicle to reduce monthly costs. This value is guaranteed based upon an agreed predetermined annual mileage and allows an option to either purchase the vehicle for this price or simply return it to the Funder with no extra cost (subject to mileage and/ or condition). Service and maintenance facilities can also be included where required. Benefits of personal contract purchase:-

1. Initial payment requirements are generally low

2. Pre-determined costs and fixed terms smooth out  personal cash flow

3. Rentals can include maintenance

4. No purchasing or disposal hassles

5. Option to purchase the vehicle at the end of the contract

6. No risks of depreciation

 

Hire Purchase: Simple, straightforward loan for the whole asset amount, paid off over a set period of time by way of fixed monthly payments. No mileage restrictions. Deposits can be often be as little or as much as you want, and loan periods can be set to suit you. Benefits of Hire Purchase:-

1. Straightforward

2. Ideal where large deposit being used, and cash-flow is not an issue

3. You own the asset at the end of the agreement