Business Car Leasing
Find out more about Business Car Leasing with MPH Vehicle Solutions
What is Business Car Leasing?
Business car leasing, sometimes known as contract hire, is an easy and cost effective way for a business to funder any number of vehicles, without having to pay for the vehicle upfront. Whether you're looking at just one vehicle or a fleet of vehicles, MPH Vehicle Solutions can help you with the supply and management of your fleet vehicles.
Business contract hire works well for all types of businesses, including Limited Companies, Sole Traders, and Partnerships, and allows you to tailor your lease agreement over a number of years and include maintenance options. Contracts range from 12 to 60 months and are tailored to the businesses requirements.
Advantages of Business Leasing:
Take a look at the advantages when looking at business leasing:
- Minimum capital expenditure.
- Accurate monthly accounting.
- Fixed interest rates for the duration of the contract.
- Reduced administration.
- On-going advice and support with MPH Vehicle Solutions.
- Road Fund Licence provided for the duration of the contract.
- Optional maintenance package.
- Optional breakdown rescue cover.
- Optional replacement vehicle cover in event of a breakdown.
- Optional GAP insurance which provides cover for the shortfall between the outstanding finance and the insurance value if the vehicle is declared a write-off by your insurance company.
There are plenty of advantages to business contract hire, but like most financial agreements there are some disadvantages to look out for:
Disadvantages of Business Leasing:
- Early termination can be expensive.
- If you do more miles than stated in your contract, you will be charged excess mileage for each mile over that stated in your contract.
- You must look after the vehicle and return it in a well maintained condition otherwise you will be charged for any damage over and above that stated in the 'Fair Wear and Tear Guide'.
- You must have fully comprehensive vehicle insurance.
- You will never own the vehicle, as there is not always an option to buy.
More Information on Business Contract Hire:
The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).
On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally 'off balance sheet funding' (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.
