Contract Hire & Leasing Finance

from Vantage Motor Group

Here at Vantage motor group we want to help you understand your different options when it comes to contract hire and leasing purchases; and there is a lot of options. We have specialist team members who are trained to assess your needs and situation in order to help make the decision making process as easy and stress free as possible. They will start by finding out whether you are looking for an Ownership or Non-ownership finance agreement. Both of the choices have benefits are are suited for certain types of businesses. The information below can give you an insight into which side might be best for you.

Ownership vrs Non-Ownership Finance

Ownership finance- Where the vehicle belongs to the purchasing business at the end of the transaction or Finance Period.

Benefits: If you go for an ownership finance option HMRC allows the Business to reclaim 100% of the VAT on light commercial vehicles and 100% business use cars, such as pool cars. The HMRC also allows the business to generate a write down tax allowance. This is based on the annual depreciation on the value of the vehicle. In these type of Finance agreement the Vehicle is an asset which is owned by, you the Business.

Suitable for: Sole Traders, Partnerships, Limited Companies and PLC's.

Types Available: Outright Purchase, Hire Purchase, Lease Purchase and Personal Contract Purchase PCP

Non-Ownership Finance- where the vehicle remains in the ownership of the contract hire company at all times.

Benefits: The rental expense and VAT is allowed by the HMRC to be a business expense. This means that 50% of the VAT on Rentals and 100% of the VAT on maintenance costs can be reclaimed. Also as a business depending on the CO2 emissions of the vehicle either 100% or 85% of the remaining rental and unclaimed VAT is allowed as a business expense.

Suitable for: Sole Traders, Partnerships, Limited Companies and PLCs and Personal Contract Hire for business users.

Types Available: Contract Hire and Finance Lease

Once you have decided on which side of the fence best suits for business needs then take a look at the type of finance agreements below. While having a browse through the different options, if you run into any questions or queries then our specialist team is waiting to help you. They are contactable by submitting an online enquiry form or by calling your nearest Vantage centre and asking for the Business Centre Manager. However you choose to contact the Vantage team we will ensure that our response is informative and timely so not to hold up your process.

Personal Contract Purchase (PCP)

Broadly speaking, Personal Contract Purchase (PCP) is similar to Personal Contract Hire (PCH), with the exception of one additional option at the end of the agreement period. Whilst PCH means that you have no choice but to return the car at the end of the period, PCP also provides you with the option to pay the outstanding balance or residual value of the car to become the vehicle's owner.

When entering into a PCP, it is important to remember that you will still be subject to mileage restrictions throughout the duration of your agreement, and it is important to keep within these to maintain the residual value of the car.

Whilst it is not necessary to purchase the car at the end of the agreement, many people go on to choose to refinance the outstanding balance and take ownership of the vehicle.

1. Monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase agreement.

2. If you decide not to buy the car, you can simply walk away when you have made all your monthly payments over the agreement term.

3. If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.