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Niche Automotive Contracts Explained
There are many types
of funding options available to
the Business & Personal sector.
The
choice of which one is right for
you depends upon a wide variety
of factors. In the text below,
we explain some of
the key differences between the
main types of funding available.
Please remember though, this is
for guidance purposes only and
we'll be happy to take you through
things in more detail, so please
don't hesitate to contact one
of our new business advisors should
you have any queries? or require
any advice or assistance. Assuring
you our best
attention at all
times.
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Contract Hire
A popular choice for VAT registered companies that want minimum outlay and maximum control of costs, especially when maintenance and relief costs can be included.
One regular payment
covers all risks including
cost of depreciation
and disposal for a
pre-agreed period,
12 to 60 months and
an agreed annual mileage
of up to 40,000 miles.
Road fund licence
is included but a
full maintenance package
is optional and can
be tailored to your
needs.
- Additional credit line
- Vat - 50% can be reclaimed on cars & 100% reclaimed on commercials
- 100% claimable on the maintenance element of the vehicle should you choose this
- Not recorded on the Balance sheet, but recorded on the notes to the audited accounts
- Fixed motoring with maintenance optional
- No worries about disposal or depreciation
- Hire rental tax allowances apply
- Depending on the value of the vehicle a sufficent amount can be offset against tax & profits.
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Personal Contract Hire
Personal Contract Hire delivers all
the benefits of a
company car to the
private individual.
Personal Contract
hire gives the user
a fixed monthly rental
for a fixed contract
term.
At the end of the
contract term you
hand the car back
to the finance company,
no need to sell the
vehicle privately
or worry about its
re - sale value.
- Low initial outlay
- Flexible deposit
- Choice of rental period
- No final payment
- Fixed monthly rentals
- Optional maintenance contract
- No disposal problems
- Optional relief vehicle
- Road fund licence included for the full contract length
- No residual risk
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Personal Contract Purchase
A variation of lease purchase, but the “Balloon” deferred payment is guaranteed (GFV - Guaranteed Future Value) and you have the option to own at the end of the contract or return the vehicle.
- Low deposit
- Fixed monthly payments
- Option to own the vehicle
- GFV - Guaranteed Future Value payment leads to lower monthly repayments
- More vehicles at your disposal compared to Hire Purchase repayments
- No disposal problems or “balloon” payment risk
- Excellent option for individuals who have opted out of a company car
- Option to re-finance GFV payment at the end of the contract.
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