Business Car Finance
The business user – corporate clients, the small businessman, or the sole trader - have a wide choice of motor vehicle finance options for their car finance in today’s marketplace. Whatever type of contract is chosen, contract hire, contract purchase, lease purchase, finance lease or hire purchase, they are usually referred to as “car leasing” contracts. At carleasinguk.com we are able to provide car leasing contracts using all the above mentioned types of contract – contract hire, contract purchase, lease purchase, finance lease or hire purchase - for business motor finance.
Our team of experts here at carleasinguk.com have years of experience, both in the car leasing industry and in the general motor trade, including specifically business motor finance. This expertise enables us to provide advice to the business community on exactly the type of car leasing contract to suit the enquirer’s needs – whether it is contract hire, contract purchase, lease purchase, finance lease or hire purchase, there will be a contract to suit any specific requirement.
Whatever type of car leasing contract is eventually settled on, contract hire, contract purchase, lease purchase, finance lease or hire purchase, the vehicles provided are sourced and supplied from our UK nationwide franchised dealer network. Our vehicles are delivered directly to the end user/contract holder at their requested address, directly from the supplier. The vast majority of vehicles on car leasing contracts are new, and rentals always include the road fund licence for the first year of the contract, along with first registration fee where applicable. Futhermore, all the vehicles on car leasing contracts – contract hire, contract purchase, lease purchase, finance lease or hire purchase - will be covered by a full manufacturer’s warranty, and also will benefit from the breakdown cover and roadside assistance cover that the manufacturer provides.
In addition to the above, some contracts, particularly contract hire, contract purchase, and lease purchase have the option to include the maintenance costs in the monthly car leasing payments. This is especially useful for those who prefer to know in advance their monthly or annual business motor finance costs – enabling the business to budget for these fixed amounts, leaving only the “consumables” such as insurance and fuels as variable amounts which are not included in the car leasing contract.
As an example, contract hire – perhaps the best known form of funding car leasing requirements – has historically been the motor popular form of business motor finance. This is in no small part due to the ease of writing a contract hire agreement for the business community: the contract hire can be taken over any period from 24-60 months, can include or exclude the maintenance element, has a fixed excess mileage charge, and parts of the car leasing contract hire are VAT-reclaimable. This enables the business user to calculate his costs for his business motoring requirements on both a monthly and annual basis. Additionally, the contract hire is available for cars and vans.
Business users of car leasing contracts, such as contract hire, appreciate the fact there are no depreciation issues for the corporate user and no disposal problems – at the end of the contract hire period the company has the option of taking out a new contract hire on another vehicle, leaving us to arrange the delivery and collection of the old car, or to simply hand the vehicle back to the finance house.
Every business motor finance client has their own dedicated business account manager here at carleasinguk.com, and the services of our Customer Services department throughout the life of the contract hire. About three months before the contract hire is due to expire the business account manager will contact the client to discuss their car leasing options with them, to ensure that they are made aware of the best vehicle offers available on and also ensure that if the vehicle needs to be specially built contract hire there is time for this.
A further option for the corporate client is Contract Purchase. A car leasing arrangement using contract purchase is solely for the business and corporate user. Here the monthly costs of the contract purchase are calculated by using the cost of the vehicle, the projected annual mileage and the duration of the contract required, together with the value of the car at the end of the contract purchase agreement. This figure is often known as the Guaranteed Future Value, or the “balloon payment”, and this provides the option to purchase the vehicle at the end of the contract purchase agreement for a known amount – the balloon payment. If the company decides that it does not wish to purchase the vehicle it can either be handed back (we will arrange collection for you); or start again with a new contract purchase agreement (again, we arrange delivery in the same way as described in the contract hire paragraphs above). The contract purchase term options are the same as those described in the paragraphs above, and additionally with a contract purchase there is the option to add in the maintenance costs, if required.
A similar option to contract purchase is lease purchase. A lease purchase contract is structured in a similar way to contract purchase, and is sometimes known as hire purchase with a balloon, at the lessor has to pay the balloon figure at the end of the contract. The monthly rentals are also determined in the same way for lease purchase contracts as for contract purchase contracts. When the end of the lease purchase agreement is reached the company then makes a payment equivalent to the balloon payment and at this point the vehicle then becomes the company’s property. Additionally, lease purchase contracts give the option to settle the motor finance at any stage of the agreement.
The final option for the business community user, or corporate user, is hire purchase. A hire purchase agreement gives the end user the ability of budget for their vehicle costs over a fix period of time, and ownership of the vehicle at the end of the term. This could be particularly helpful to the small businessman or sole trader. The hire purchase agreement can be specifically tailored to the end user’s requirements and typically can be any duration from 24-60 months. The monthly payments are a fixed item, the initial road fund licence (and vehicle’s first registration fee, if applicable) will be included in the sum financed, although subsequent road fund licences and all “consumables” such as service, repairs, insurance, fuels etc will be the responsibility of the hire purchase agreement holder.
As you will see from the paragraphs above, the types of contract available – contact hire, contract purchase, lease purchase and hire purchase, to the corporate or business consumer are various. Our team of expert advisers here at carleasinguk.com will be happy to provide quotations and advice on business motor finance on any of the contracts mentioned, and to answer any questions that you may have.
