Finance Types - Car Leasing, Contract Hire & Van Leasing
Contract Hire is often reffered to as Car Leasing.
Ideal for our current economic climate. Comprehensive, fixed cost funding method, with no depreciation risk.
Deposits are anything from 1 monthly rental upwards.
The running cost of cars and light commercial vehicles is one of the biggest expenses most businesses face. Add to that the risk of depreciation, and it’s no wonder Contract Hire and Car Leasing is such an appealing option.
Whether a customer is running a single car or a fleet of 10,000 vans, contract hire enables them to control one of their biggest expenses.
Key customer benefits:
- The vehicle appears off ‘Balance Sheet’ as it is owned by the car leasing company
- Tailor-make your own package with bolt-on products and benefits
- No financial risk associated with disposing of the vehicle
- Purple Contracts' considerable buying power enables us to pass on the savings to our customers through low cost rental as well as highly competitive ancillary products such as maintenance, foreign travel cover and accident management
- From April 2009, customers who rent cars with CO2 emissions below 160gm2 will receive even greater tax benefit (and as we are part of the world’s largest fleet management company, we can certainly offer our customers the widest possible selection of vehicles)
- The convenience of a full maintenance service, at a fixed monthly cost, is optional
- Road Fund Licence is provided for the full term of the contract.
- There is VAT recoverability at 50% for the supply of the vehicle and road tax licence. There is also VAT recoverability at 100% for optional services subject to the customer’s VAT status.
Contract Hire – also known as a car lease - is the most common type of lease available in the UK, and remains extremely popular among Purple Contracts' customers.
At the end of the contract, we will collect the vehicle and deliver you a replacement - simple!
Personal Contract Hire (PCH)
Ideal for our current economic climate. Comprehensive, fixed cost funding method, with no depreciation risk.
This funding method is basically contract hire for the private individual. It is known by most individuals as “leasing a car”.
Personal Contract Hire can offer a cheaper alternative to Drivewise (or “Personal Contract Purchase”) where the car leasing company is benefiting from their purchasing terms with the manufacturer or chosen supplier.
Key customer benefits:
- Purple Contracts' buying power drives down monthly rental costs
- Fixed monthly rental that can include additional services, such as maintenance – no cash flow fluctuations
- None of the depreciation risks associated with ownership
- The convenience of a full maintenance service, at a fixed monthly cost, is optional – although some of our Finance Companies will insist on a Maintenance Contract.
- Road Fund Licence is provided for the full term of the contract.
At the end of the contract, you can choose to return the vehicle and do nothing else at all, or you can request a purchase price if you want to buy the vehicle, or we can collect the vehicle and deliver you a different one - simple!
Finance Lease
This facility provides you with the benefits of ownership with minimum deposit and maximum flexibility.
Finance Lease is a popular funding option for commercial vehicles where Contract Hire is not suitable. (Cars can be financed as well)
Key customer benefits:
- Purple Contracts' buying power helps you to benefit from low monthly rentals
- Monthly rentals can be lowered further through the introduction of a balloon rental at the end of the contract. This can be set at a value equivalent to a forecasted residual value or reduced in line with anticipated wear and tear on the used value
- Available option to re-finance the balloon payment over a longer period of time.
- Repayment period of up to 60 months.
VAT is paid monthly, then claimed back in your normal VAT cycle (if VAT registered).
Rentals are 100% allowable against taxable profits for Commercial Vehicles and 50% for passenger cars.
Facility can have a balloon profile, which defers a large payment to the end of the contract - thus reducing monthly rental and aiding cashflow.
Vehicle sold or part-exchanged at end of contract and the hirer benefits from 98% of sales proceeds.
Ideal for business users looking for low initial deposit and maximum flexibility.
No mileage clauses.
PCP (Drivewise)
Personal Contract Purchase (Drivewise) for private individuals - Cars Only
One of two funding methods (the other being PCH) which we offer to private individuals who may wish to opt out of a company car scheme or would like a car for private use. Drivewise also gives you the benefits of leasing a vehicle along with the option to own it if you so desire.
Drivewise enables you to upgrade to vehicles that might otherwise be unaffordable.
A guaranteed residual value is set at the start of the contract, which gives you a number of options by the end, some of which are:
- Part-exchange the vehicle and use the equity as a deposit for the next vehicle
- Keep the vehicle by paying the outstanding residual value
- Hand the vehicle back and end the contract
Key customer benefits:
- You can trade up to an otherwise unaffordable vehicle (e.g. an executive/ sports car)
- Hassle-free and cost-effective way to finance a vehicle
- The convenience of an optional full maintenance service, at a fixed monthly cost, is available.
Hire Purchase
Hire Purchase is a simple, cost-effective route to purchasing your vehicle.
Low Deposit - Vat Only (or more, if you prefer)
Flexible Repayment period - up to 60 months
Fixed Monthly Repayment aids budgetary control and cashflow
Monthly repayments are VAT free
VAT deposit reclaimable (VAT registered customers)
100% of interest charges can be offset against taxable profits
Vehicle is an asset on your balance sheet and benefits from the normal writing down allowances.
Ownership of vehicle will pass when the agreement is completed
Are you confused by all these finance methods?
If so, don't worry, just call us for a free Finance Consultation and we'll discuss the pro's and cons of car leasing, contract hire and hire purchase to make sure you get the right one. Our number is 08456 444300. Talk to Purple!
Purple Contracts Car Leasing and Van Leasing, Cardiff, South Wales.
