The Benefits of Business Contract Hire
How does Business Contract Hire work in the UK?
The funding of company vehicles, regardless of fleet size, can be a significant drain on financial and human resources, especially at a time when resale values are increasingly volatile.
Business contract hire, business car leasing or company car contract hire in the UK can remove both the financial and administrative burden from your business. It can deliver a tax-efficient form of funding which eliminates risk and smooths cashflow.
* Your company hires a vehicle from us for a pre-determined period at a fixed monthly rate.
* We retain ownership and at the end of the fixed period the vehicle is simply returned to us.
* The single, fixed monthly rental takes into account the cost of the car, its rate of depreciation, the length of the contract, mileage and any additional services you may wish to build in.
* The majority of our customers choose to include maintenance cover within their company car contract hire, with full RAC breakdown and recovery service, keeping drivers on the road without involving the company in complex or costly administration.
Business Contract Hire – The Benefits
* Low initial payment, typically equal to 3 monthly rentals.
* Currently off balance-sheet funding as all risk and reward remains with arranger of the contract.
* Rental allowances typically provide accelerated tax benefits.
* The arranger reclaims the VAT on the purchase of the vehicle, and passes that saving on to you in the form of lower monthly rentals.
* It removes disposal risk and protects your future profits.
* There is usually an option to take out a maintenance-inclusive contract hire agreement which will remove the inherent risks associated with running a fleet of company vehicles.
* Your monthly fleet outgoings are fixed and incorporate realistic running costs, giving you greater budgetary control.
* Improved financial gearing for your business.
* Lines of credit can be better utilised for investment in your core business.
* Flexible company car hire contracts to reflect the changing nature of your business.
* Peace of mind.
In summary business contract hire makes significant commercial sense for business owners of all sizes – whether you are a start up business requiring a company car or a fleet manager responsible for running hundreds of company cars across a large organisation.
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