Company Car Leasing usually refers to Business Contract Hire which is a form of car leasing that allows you to drive a new or used vehicle over an agreed period of time and mileage. This gives you access to new vehicles but with none of the depreciation risks associated with purchasing a new vehicle outright. You have the option to include a full maintenance package with covers service, maintenance and repair costs. In other words worry free motoring. Therefore you can budget more accurately for all your business motoring.
When your contract hire agreement ends there are a few options available to you. The options can vary depending on the finance provider the vehicle value and even the economic climate.
- Return the vehicle to the finance company and take another.
- Get an extension on the lease for example, 6 or 12 months.
- Purchase the vehicle (whilst there is no legal option to purchase the vehicle, it is often in the funder’s interest to consider this option as it can save them the collection and auction costs)
You should return the vehicle to the leasing company in a condition that meets the ‘Fair wear and tear’ guidelines, otherwise charges may be incurred.
The Benefits of Contract Hire
- Low monthly repayments
- Flexible terms from 24 to 60 months.
- Option to extend the lease period at the end of the contract.
- Return the vehicle at end of contract and start a new agreement on a new vehicle lease.
- No hassles with selling the car or losing money on the company car value therefore better cash flow management.
- Your business is only paying for the depreciation of the vehicle over the length of your lease contract. As a result this frees up more cash for your business to spend on development and growth.
- You can claim repayments as a company expense.
- VAT Benefits – 50% of your VAT on contract hire payments can be claimed back and 100% of VAT on a maintenance package can be reclaimed.
- The car leasing company handles all administration of the vehicle throughout your contract. Which subsequently eliminates the need for businesses to spend valuable resources doing this in-house.
- Leased cars are not counted as assets therefore the company balance sheet will show an immediate improvement.
What are the potential risks of Business Car Leasing?
- If you return the vehicle damaged you may incur charges to repair that damage.
- Terminating the lease early may make you liable to pay an early termination fee.
- An excess mileage charge is payable if you have exceeded the agreed contract mileage.
What's included in Business Contract Hire?
- Complete support and guidance throughout.
- Road Tax included throughout the contract.
- Bespoke contract terms, payment profiles and mileages. In other words we can be as flexible as you need.
- A comprehensive vehicle maintenance package (if selected as part of the contract) including all servicing and maintenance.
Am I eligible for Company Car Lease?
You need to meet certain criteria in order to qualify for a business car lease contract:
- Sole traders, partnerships, Registered Charities, Ltd companies, LLPs and PLCs all qualify.
- You must be able to provide bank statements and/or audited accounts if required.
- The company director may need to provide identification for example a copy driving license.
- Above all the business should have a good credit rating or show potential.
Where do I begin?
The best place to start the search for your new vehicle is on our website www.leaseworld.co.uk
See our business lease special offers or use our vehicle lease search facility.
Find the business car you want, customise your terms and send us an online enquiry form.
If you would prefer to speak to us straight away, please phone us on 0118 9420030 and we will be on hand to help.