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Types of vehicle finance

Guides

For company purchase:

Contract Hire: the most popular choice for VAT registered companies wanting minimum outlay and maximum control of costs, especially when the maintenance and relief vehicle options are included. One regular rental payment covers all risks, including depreciation and disposal costs. Contracts are for an agreed period of time and set mileage. Road Fund Licence is included. Roadside rescue, maintenance and relief vehicle provision are options that can be added, and charged to the rental payment.

Contract Purchase: for companies requiring eventual ownership of their vehicles, without depreciation risks. The customer acquires the vehicle by paying fixed monthly instalments, shows the asset on the company balance sheet and can either retain ownership at the end of the contract by paying a final pre-determined balloon instalment, or hand the vehicle back if not required. Maintenance can be added to the contract, thus providing the fixed cost benefits as with Contract Hire.

Finance Lease: ideal for VAT-registered companies wanting to handle the administration of vehicles and show the asset on their balance sheet. A VAT-beneficial finance option where the hirer can choose to pay the entire cost over the agreed lease period, plus an interest charge, or pay lower monthly rentals during the lease period with a final payment based on the anticipated resale value of the vehicle.

Lease Purchase: attractive for non-VAT registered companies, this funding agreement allows the company to acquire ownership of the vehicle when all the payments (including the option to purchase) have been made. Part of the capital cost of the vehicle payment may be deferred into a balloon payment, which equates to the anticipated market value of the vehicle at the end of the agreed contract period.

Sale and Leaseback: for companies looking to generate capital from the sale of their vehicles and, at the same time, retain their use. This VAT-beneficial scheme involves the finance company purchasing the vehicles for an agreed price, and leasing them back, using either Contract Hire or Finance Lease facilities. This can provide a welcome injection of cash for a business.

For private purchase:

Hire Purchase: after paying an initial deposit, the balance is repaid by fixed, equal monthly payments. On completion, ownership transfers to the buyer. The payments are VAT-free.

Personal Contract Hire: delivers all the benefits of a company car to private purchasers, through a fixed monthly rental for a fixed contract term. At the end of the contract term the vehicle is returned to the finance company taking away the hassle of selling privately and the worry over unexpected levels of depreciation.

Personal Contract Purchase: for private purchasers wanting a hassle-free and cost-effective way to finance (and maintain) a vehicle. A fixed monthly charge offers significant tax advantages and a change of vehicle every two or three years. An all-inclusive maintenance and breakdown package is also offered, as an optional extra.


If you are interested in having one of our account managers contact you to discuss your requirements, then please fill in an enquiry form and submit:

>> Business enquiry form

>> Personal enquiry form

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