Contract Hire & Leasing
Run Your Fleet are able to offer a choice of funding methods for your company vehicles. We have direct access to funding lines for contract hire and finance lease, and we are also able to search the market on your behalf for any other vehicle funding you require. Please see below for an explanation of contract hire and finance lease:
Contract hire is a finance solution available to sole traders, partnerships and limited companies. Contract hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element. It also allows the company to concentrate on their core business activities, while avoiding the financial risk and administrative burden of owning their vehicle fleet.
How Does It Work?
The company hires a vehicle from a provider for a specified period of time and makes regular monthly payments to rent it. The leasing company retains the ownership of the vehicle and is responsible for the associated risks. At the end of the contract period, the vehicle is returned to the leasing company.
For example a Run Your Fleet customer has taken out a contract hire agreement on a Ford Transit. The contract is for 36 months with an annual mileage of 20,000. After the initial payment of 735 + VAT, the customer pays a monthly rental of £245 + VAT direct to the finance company. As the customer is VAT registered, they are also able to claim back the VAT on the rental payments. At the end of the 36 months, the Ford Transit is returned to the leasing company and the customer is free to hire or purchase another vehicle.
What Are the Benefits?
Key features and benefits include:
- Fixed rentals for the whole package, making budget planning easier
- Flexible duration and mileage terms to meet your requirements
- Maintenance of vehicles can be included in monthly rentals, and so spread the cost
- Contract hire removes depreciating assets from the balance sheet and the associated risks of owning vehicles
- Flexible invoice arrangements help to considerably reduce administration
Contract Hire agreements typically range from 24-48 months and are tailored to the business requirements.