The Benefits Of Contract Hire And Leasing Vehicles

The Benefits Of Contract Hire And Leasing Vehicles

A great advantage of​ car leasing is​ the potential to​ enable people to​ drive the cars they want, but can't necessarily afford to​ buy outright. this​ alone makes it​ a​ very attractive purchasing method for​ many individuals and​ start-up businesses wanting to​ make a​ positive, professional impression​ by driving an​ executive vehicle. Contract hiring also allows people to​ easily change their cars more frequently than through traditional buying and​ selling. this​ means that as​ well as​ being able to​ upgrade as​ your​ circumstances or​ preferences change, it's also possible to​ never drive a​ car that's more than 3 years old so you​ can benefit from having the manufacturers warranty to​ cover maintenance costs and​ never have the inconvenience or​ expense of​ needing to​ take the car for​ an​ MOT.

Off Balance Sheet Funding
Under contract hire, your​ vehicles do not appear on​ your​ company's balance sheet as​ they are owned by the contract hire company. The removal of​ capital assets from your​ balance sheet can enhance a​ company's gearing (borrowing) ratio. Simultaneously, your​ business image can benefit from employee use of​ a​ high specification​ vehicle. if​ your​ business is​ in​ a​ strong financial position​ at​ the end of​ the lease period, you​ can choose to​ make the final payment for​ the outstanding amount of​ the guaranteed minimum future value determined at​ the start of​ the contract and​ add the vehicle to​ your​ assets at​ that time. if​ your​ company will be of​ more benefit without the ownership of​ the vehicle, you​ can return the vehicle and​ start a​ new contract on​ a​ replacement model of​ your​ choosing.

Fixed Monthly Cost
A fixed monthly payment is​ charged over the life of​ the contract and​ the initial up front payment is​ normally just three month's rental. this​ payment is​ calculated by considering the cost of​ the vehicle, the anticipated mileage and​ it's future value at​ the end of​ the hire period. Fixed monthly costs for​ the period of​ the contract makes budgeting much easier and​ you​ do not have the added worry of​ unexpected high payment demands. Additionally, more accurate budgeting improves your​ company's cash flow allowing flexibility in​ other margins. Any extra mileage is​ paid at​ the conclusion​ of​ the lease period, rather than in​ additional monthly charges. By ensuring employees keep to​ the agreed mileage limit, there will be no top up fee needed at​ the end of​ the contract.

VAT Benefits
Contract hire has many VAT benefits that can be passed on​ directly to​ customers. as​ contract hire companies are able to​ claim back the VAT on​ the purchase price of​ any new car, once the vehicle is​ on​ the road, they can make a​ claim back of​ one hundred percent of​ the VAT on​ the servicing aspect of​ the rental price and​ fifty percent of​ the finance rental cost. this​ is​ a​ real bonus to​ businesses, in​ comparison​ to​ vehicles owned directly by the company, which are deemed assets.

Reducing your​ Financial Risks
It is​ essential to​ manage the risks involved in​ running a​ vehicle fleet and​ by opting for​ contract hire you​ are able to​ do precisely that. Contract Hire enables you​ to​ simply pay the monthly fixed rental price and​ insure and​ fuel the vehicles. at​ the end of​ the lease period, a​ further lease can be taken out on​ new, replacement vehicles, reducing the likelihood of​ any being taken off the road for​ maintenance as​ would be ordinarily expected as​ they age and​ preventing the need to​ make good any wear and​ tear that would be expected with increased age and​ mileage of​ a​ vehicle. this​ ensures your​ fleet is​ always made up of​ top specification, high performing and​ excellent condition​ vehicles.

Contract Hire can be a​ sound financial decision​ for​ a​ business that requires use of​ a​ car or​ van and​ the flexibility to​ regularly change the motor vehicles in​ use, ensuring a​ professional image with high quality vehicles always representing the company. Contract Hire is​ the leasing of​ a​ vehicle to​ a​ business (usually VAT registered), for​ a​ fixed period of​ time with a​ pre-defined mileage at​ a​ fixed monthly rental. The price is​ based on​ the agreement length, estimated mileage and​ the value of​ the vehicle once the contract has been completed. Maintenance packages are sometimes included, however suitability will depend on​ your​ mileage and​ general usage of​ the vehicle.

The Benefits Of Contract Hire And Leasing Vehicles

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