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For people that don’t want to purchase a vehicle outright car leasing is a good option. it is a way of financing a vehicle that can work out cheaper per month than purchasing a vehicle and as a result often allows the person leasing a vehicle to afford a vehicle that might ordinarily be out of their budget. It differs from other forms of ownership in that at the end of the agreement the person leasing the car returns the vehicle to the people they have leased it from.

As a result it can be seen as a longer term version of car hire. The period of a car leasing contract typically lasts between a year and three years with the longer term contracts generally costing less per month. The major benefit of this type of agreement is that it enables the person that is leasing the vehicle to keep a close eye on their expenditure. There are a number of agreements that include insurance and maintenance costs so that the person leasing the car does not experience unexpected costs as a result of problems that could result from using a vehicle. This can make a person that leases a vehicle much more confident about their monthly costs and not feel worried about incurring additional costs.

People that utilise car leasing are often able to afford a vehicle that they might not ordinarily be able to afford. This is because when leasing a car you do not have to pay a large down payment as is necessary when purchasing. Also because you do not pay off the value of the car over the period the monthly cost can generally work out less than paying for a vehicle. The person leasing the vehicle does of course not own the vehicle at the end of the contract but rather returns the vehicle to the owner. This in itself has a number of benefits to the person leasing the vehicle.

Firstly they do not have to worry about the depreciation in value of a vehicle and secondly they do not have to concern themselves with selling a vehicle on when they want to upgrade. At the end of the contract with the leasing company the person using the vehicle can simply return the keys and walk away or choose a different vehicle.

There are also numerous benefits for the people that present the car leasing deals. These advantages include that for a person that leases a vehicle they can receive an income for a vehicle and providing they price their deals effectively there can be a lot of money in car leasing. The person or business that leases a vehicle does however take the risk of ownership of the vehicle. If the vehicle depreciates significantly in value over the course of the contract then the people that lease the cars out are the ones that suffer.

If the car leasing company fails to build in a large enough margin they can suffer losses but this is unlikely. It is however likely that people that lease a vehicle are likely to be harder on a vehicle than if they owned it and as a result the leasing company suffers the effects of a mistreated vehicle.

People that utilise car leasing often update their vehicles regularly and they can typically drive around the newest versions of a vehicle and update every couple of years. This means that they can often afford vehicles that would usually be out of their budget and as a result they can also feel less anxious about its upkeep.

Shaun Parker has been at the forefront of the car hire and car leasing industry for several years. He has arranged finance for hundreds of satisfied customers.

Contract hire is a way of financing a vehicle that is popular with both business and personal users. It is different from purchasing in a vehicle in that the person or business that hires the vehicle do not own the vehicle but rather pay a monthly fee to hire it before returning it at the end of an agreed period of time. In this respect contract hire is very similar to conventional hire deals however there are a few fundamental differences.

Contract hire is generally arranged over a longer period of time than normal car hire deals and these longer length of deals usually range between 12, 24 and 36 months. The majority of deals on contract hire last for three years the major benefit of these long term deals for the person leasing the car is that they generally work out cheaper than the shorter term deals. For the company that lease the vehicle this also provides a greater level of security as they can feel confident that there vehicle will bring in an income over a longer period of time.

Contract hire is often arranged by finance companies who calculate the cost of the rental price based on the levels of depreciation in value of the vehicle, the funding costs of purchasing the vehicle and the cost of the administration associated with arranging the deals.

The company takes full responsibility of ownership of the vehicle and will suffer if they do not calculate their margins effectively. At the end of the contract the person that has used contract hire returns the vehicle without having to worry about selling it on and the finance company take on this responsibility. The contract hire company also has to ensure that they receive the monthly fee and they often build in a down payment that might be two or three times the value of the monthly payment. This is done to secure the deal in the event that the person leasing the vehicle can’t pay off what they own.

The contract hire deals are usually offered with insurance included as part of the monthly payment. It is also possible to have maintenance costs included in the price of the contract and furthermore breakdown cover can also often be added. This means that someone that utilises contract hire can do so without having to worry with any of the unexpected costs that are related to owning a vehicle. Often the only additional cost that people that use contract hire have is fuel. This can be a really desirable aspect of contract hire and makes it a particularly appetising proposition for businesses that need to keep monthly outgoings static.

It is also beneficial to businesses as it does not mean that they have to fork out large sums of money to purchase a vehicle and do not have to worry about selling them on when they become outdated. This also means that they can afford good quality cars which in turn give a good image of the company.

Contract hire has steadily become more popular in the UK as more people begin to understand the benefits of contract hire over purchase. It is fast becoming the favoured methods for business and company cars in the UK and with the credit crunch setting in many people are choosing it as an option for their personal car. It is particularly beneficial to businesses as there are many tax advantages for businesses.

Shaun Parker has been at the forefront of the car hire and contract hire industry for several years. He has arranged finance for hundreds of satisfied customers.

Car leasing is gaining in popularity for personal car users that are looking for alternatives to purchasing a vehicle. Car leasing has always been a very popular option for business users who want to fund their company car. This has been the case for a number of reasons. Firstly businesses are able to keep an eye on a tight budget by paying a monthly fee.

This also means that the business does not have to worry about paying the large down payments associated with purchasing and the responsibility for the vehicle remains with the company that lease it out. These benefits are of course transferable to personal car leasing customers. The other major benefit to business car leasing customers is that they often benefit from many tax advantages and as a result it has long been popular for businesses.

Perhaps as a result of the recent credit crunch in the UK people are turning to car leasing for their personal cars as unlike purchase the monthly fees are static and for people that struggle to get approved for a loan leasing is a good alternative. There are many advantages to personal car leasing for both the customer and the provider.

It is a finance option that enables the person that undertakes it to afford a vehicle that they wouldn’t already be able to afford. Throughout the deal the vehicle remains the property of the leasing company and as a result the person that uses the vehicle does not have to take responsibility for selling it on when they want to move on they simply have to return the car and the keys and they are free to walk away.

This means that someone that is leasing a vehicle can easily change vehicles once their contract is up without having to go through the arduous process of selling a vehicle on. The major benefit of not owning the vehicle is that the person that utilises vehicle leasing does not have to worry about paying the vehicle down-payment that you have to pay when you are looking to purchase. This means that you can have free ownership of a vehicle without having to go into debt and take up a loan for it.

Car leasing is popular over a number of different time periods the length of the contracts are usually between 12, 24 and 36 months. The reason for this is that for the company that lease the vehicle it is beneficial to arrange the contract over a longer period of time. This means that the leasing company can be assured of an income for a vehicle over a longer period of time. The benefits of this to the company that lease the vehicle are obvious but there is also a benefit to the people that lease a vehicle.

The main benefit for longer term leasing is that it generally works out cheaper than leasing over a shorter period of time. Because the company can be assured that you will be paying out a set amount of money each month they can lower the monthly costs of their deals and offer you incentives. This means that the longer the term of the leasing contract the less money you will pay. This is a real benefit to many people and often their budget will stretch further and they will be able to afford a better vehicle.

Shaun Parker has been at the forefront of the car hire and personal car leasing industry for several years. He has arranged finance for hundreds of satisfied customers.

Contract hire is a very straightforward and inexpensive way of running company cars. It couldn’t really be simpler you have fully budgeted costs over a fixed term, off balance sheet borrowing, without the complication of disposing of existing vehicles, when the time comes to renew company cars. Even maintenance can be included in the monthly rental. It is however important to avoid some of the pitfalls that can be encountered when choosing this route.

Firstly if the contract hire company is not one of the large and better know companies it is important to establish their policy with regard to the condition of the vehicle when it is returned at the end of the contract hire term.

Most of the established companies say that the vehicle must be returned in a condition that is deemed as fair wear and tear for the age and mileage of the vehicle, as set out in the BVRLA guidelines. It is important to establish that you are not dealing with a company that plans to profit from charging for work to be carried out on the vehicle that is not reasonably required considering the age and mileage of the vehicle. It also is important to have someone from your company present at the handover; one hears of cases of contract hire companies, charging for missing service records, when the hirer was certain they were in the glove box.

A contract hire agreement will be for a fixed term and there will be a specified number of miles the vehicle can be driven during that term, this will be the mileage that has been requested by the hirer. Sometimes it can be difficult to predict how many miles a vehicle is going to do and of course circumstances can change. It is therefore a good idea to check what the charge will be for excess mileage.

On occasions you will see a vehicle that appears quite inexpensive but has a higher than normal charge for excess mileage. Most companies are flexible and will allow you to renegotiate mileage, part way through the term it is worth checking that this is the case with the company you are considering. The whole idea of contract hire is that you have fully budget costs and finding yourself with a large bill at the end of the term, rather defeats the object.

It is also important to make the employee who drives the vehicle responsible not only for it’s condition but also for ensuring that the vehicle is serviced at the appropriate service intervals. It should not be the company that has the responsibility of making sure the vehicle is serviced on time; the driver of the vehicle will after all see the appropriate warning come up on the screen and should advise the company accordingly.

Failing to service the vehicle within the designated time can have serious consequences; it can invalidate the warranty leaving the company exposed to the cost of any further mechanical or electronic problems that the vehicle may encounter. This again defeats the object of fully budgeted fixed costs.

There are cases of employees continuing to drive a vehicle for many miles after an engine warning light has appeared. It’s difficult to understand the thinking behind this action. One possibility is that perhaps they believe that they can take the vehicle into the dealership some time later and say that the warning light has just appeared; electronics these days are very sophisticated and very often the dealership, with the help of it’s diagnostic equipment, can see not only when the warning first appeared but also how many miles have been driven since.

This again is likely to invalidate the warranty, the same can apply if you fill a diesel car with petrol and then drive it. Under those circumstances you will be responsible for the cost of repairing anything else that may go wrong with the vehicle for the remainder of the contract hire term. Cars tend to be very reliable these days so you could be lucky but contract hire is not about being lucky, it’s about knowing where you stand financially.

There is potentially another problem should this happen and that is that if the contract hire term of the vehicle is less than three years, it is unlikely that the contract hire company will be willing to take the vehicle back without looking for some form of compensation. This is because most vehicles have a three-year manufacturers warranty and they will then be selling a vehicle without the remaining warranty. This can significantly affect the value of a second hand vehicle.

To summarise check the contract hire company’s policy with regard to their requirements for the condition of the vehicle at the end of the contract hire term and also the charge for excess mileage. Make the employee responsible for the condition of the car and for advising the company when a service is due. It also seems sensible to make them aware that they are responsible if they do anything that invalidates the vehicle’s warranty. This should help the company to enjoy the fully budgeted costs of contract hire.

For more information about contract hire, lease purchase, finance lease or vehicle hire purchase in the UK please contact Bowater Price plc 01494 536 536.

Contract Hire is for companies and Personal Contract Hire is for individuals, there are however circumstances where it is not at all clear as to which route a company director, sole proprietor, or partner should take when acquiring a new car. Certainly if a business is not Vat registered one of the advantages of taking a vehicle on Contract Hire has been excluded. This is because a company can normally reclaim 50% of the Vat on the monthly rental, and if maintenance has been added, 100% of the Vat on the cost of maintenance.

Another factor is the value of the vehicle and Co2 emissions of the vehicle. Co2 emissions are an important consideration in respect of the tax you will pay, if you are acquiring the vehicle for company use. It is not a factor if the vehicle is for Personal Contract Hire, except of course from an environmental point of view.

If you are uncertain which route may suit you and the company best with regard to taxation, you could ask your accountant to carry out an exercise taking into account all the various factors, so you can see what the bottom line is in each case. However what is far more likely to decide the route you eventually take is convenience.

It is so often the case that paying for a vehicle or for that matter anything through the company is so much more comfortable, than paying out of one’s pocket, regardless of the tax benefits one way or the other. Company directors tend to spend much more freely on the company credit card, then they would ever consider doing with their own card and indeed why not; there are so many disadvantages in owning and running a business nowadays that having a nice car through the business and “entertaining clients” on the company credit card, goes some way to compensate for some of the stresses and strains that company owners encounter on a daily basis.

Another factor that needs to be taken into account when making a decision, are the various rates available on the particular vehicle you are considering. It is not unusual to see a Contract Hire rate that is a lot less expensive than the same vehicle is available through Personal Contract Hire.

There will always be a difference because Contract Hire rates are quoted as + Vat, for example 200 British Pounds per month +Vat and if the same rate were available on Personal Contract Hire it would be 235 British Pounds inclusive of Vat. However the same rate is not always available to both, because some companies that have very competitive Contract Hire rates do not offer Personal Contract Hire. You could therefore have the additional cost of arranging it through another lender, and in addition the Vat cost to consider.

If you do ask your accountant to compare the two methods, it will be helpful to give him an indication of your anticipated mileage per annum. This is because when using your own vehicle for company use you can claim 40 pence per mile for the first 10,000 miles and 25 pence thereafter, so it could be an important factor in the calculation. You may find that Personal Contract Hire is the most efficient but decide you prefer the convenience of putting it through the company and arrange it on Contract Hire anyway. If it creates an extra tax burden you could let the company pay that as well by awarding yourself an extra dividend to cover the cost.

For more information about contract hire, lease purchase, finance lease or vehicle hire purchase in the UK please contact Bowater Price plc 01494 536 536.

There are various ways a company can reduce the maintenance costs of it’s fleet. A maintenance contract is an option that is offered as part of contract hire and personal contract hire. However it is worth considering carefully, if indeed it is worthwhile taking up. Every case is different but often the additional cost is not justified. As to whether it is worth considering will partially depend on the mileage that the vehicle is likely to do.

Assuming that you do not have a maintenance contract the following suggestions could be worth considering; when the vehicles go into the dealership for servicing, you could ask them to carry out the basic service and list any other item that they feel needs attention, providing of course there is not a safety issue involved. This will help avoid having tyres changed because there is only 2000 miles (”approximately”) of wear left. Well 2000 miles is 2000 miles and on occasions those 2000 miles of wear, when checked independently have proved to be 5000 miles. If you multiply that across your fleet or indeed if you have just one vehicle, it’s a lot of money.

The dealership may argue that if the tyres are not changed when the vehicle is in for a service, it may then be overlooked. With serving intervals now often 18,000 miles apart and more, if that were the case, if a car only has 16,000 miles of wear left presumably you would also have to change them on the basis that they wouldn’t last until the next service, and may get overlooked.

When it comes time to change tyres or indeed brake pads there is no reason to have the dealership carry out the work, although it is important to follow the manufacturers recommendations. So when buying tyres avoid tyres that are “exactly the same” as those recommended by the manufacturer.

The fact is that much of the work carried out by the main dealership is often more expensive than it would cost elsewhere. There are many organisations that can supply and fit the manufacturers recommended tyres, significantly cheaper. Many of them will probably be local to you and will allow a company to open an account with them.

Having a car serviced at a main agent is generally not in its self terribly expensive; it is everything else that is carried out at the time of the service, which usually proves to be costly and is of course the most profitable part of servicing for the franchised dealer. In a study carried out by the Office Of Fair Trading they estimated that 1.4 Billion is spent every year on servicing cars up to three years old and that after sales costs represents approximately 40% of the whole life cost of a car.

In any event leaving your vehicle with the dealership and telling them to carry out whatever the vehicle requires, is probably not advisable if you want to avoid nasty shocks. It often comes down to a matter of opinion as to what a vehicle requires; there have been cases of the owner, on collection of the car, being told that the air conditioning gas had been found to be low, so they re- gassed the system, at a cost of 180 British Pounds, when the owner was quite happy with the way it was working previously. If indeed the system does require re-gassing it will usually prove a lot less expensive to call in a private company.

In summary if your vehicle is on contract hire or personal contract hire certainly consider the inclusive of maintenance option, it can have its advantages; some will for example cover damaged tyres and some have the option of an immediate relief vehicle in the event of a breakdown. However do look at the servicing intervals and the mileage the vehicle is estimated to do over the term, this can be an important consideration when deciding if it is worthwhile. If you do not have a maintenance option consider the possibility of having all the additional work carried out where it will be less expensive to do so.

For more information about contract hire, lease purchase, finance lease or vehicle hire purchase in the UK please contact Bowater Price plc 01494 536 536.