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Frequently Asked Questions

I own my cars at the moment; what are the advantages of funding them through Contract Hire?

The advantages Contract Hire offers are:
  • Fixed monthly costs to help with more efficient cost management
  • No depreciation risk on the vehicle resale value
  • VAT efficient
  • Off balance sheet funding
  • Available with or without maintenance
  • Flexible terms and mileages to suit your needs

We also provide a Sale and Leaseback programme where we will buy your vehicles from you, giving you a cash lump sum to put back into your business and then we will lease the same vehicles back to you. This offers you minimal disruption and allows you to inject the cash you have released from the vehicles back into your core business activities or to expand your business.

How can Contract Hire save me money?

With Contract Hire:
  • Your vehicles remain a business expense, but never appear on your balance sheet *
  • Enjoy fixed, lower monthly payments due to the VAT advantages of leasing
  • Operational costs are more predictable, so you can manage your fleet effectively
  • You can add ancillary services such as vehicle maintenance, Fleet Administration, or Duty of Care
  • You don’t need to worry about having to sell vehicles yourself
  • Your cashflow is freed up for you to use elsewhere in your business
* Operating leases, which include contract hire, are likely to be required to be reported on balance sheet in the future. The timing of this is presently unclear. The current proposal is that this will apply to all organisations reporting under International Financial Reporting Standards and all UK limited companies, except SMEs. A new accounting standard is expected in 2015 and it is likely the new rules will come into force in 2018, with comparative figures required for 2017.

What does off balance sheet mean?

Currently operating leases are reported off-balance sheet. This means future lease payment obligations are disclosed in the notes to the financial statements but do not appear on the face of the balance sheet. By contrast, assets which are outright purchased, or funded via hire purchase, contract purchase or finance lease are treated as fixed assets and recorded on your organisation’s balance sheet. There is also a corresponding debt liability which matches the value of the asset on acquisition and is reduced by the amount of monthly finance payments made to the funder.

What are the VAT benefits?

All leases, including contract hire, are eligible for VAT relief on both cars and commercial vehicles, provided your organisation is VAT registered and able to recover VAT. Whereas for commercial vehicles, all forms of funding are eligible for VAT relief (up to a maximum of 100% of input VAT), for company cars with private use, both contract hire and finance lease enable a maximum of 50% input VAT recovery (new cars). For other forms of funding there is no VAT recovery unless the car has no private use.

How flexible is Contract Hire?

With Contract Hire you are free to change the term and mileage of the contract up until the last 6 months of the contract. This enables you to examine those drivers that are running over or under mileage and then adjust the contracts accordingly to avoid any unexpected end of contract mileage costs. We can also organise a pooled mileage agreement for you in order to help offset under mileage vehicles against over mileage vehicles. With Contract Hire you are free to add or exclude maintenance as required.

Do I have to go to a specific garage to have my vehicles serviced?

Yes, we have our own preferred network in place. Where possible we will arrange for your vehicle to be serviced through your local dealer. Please call Vehicle Service Management to book a service online, by telephone, fax or email. We can take the administrative burden away from you so you can focus on other tasks. Contact us for more information.

What happens if a company car driver leaves?

If an employee leaves your organisation, their vehicle can be reallocated to another driver. If there is currently no driver to reallocate to we can temporarily store the vehicle on your behalf at our Cardiff storage facility, until such time that it can be reallocated (Please be aware that there is a cost to use this service). Alternatively, we can arrange early settlement of the contract. Please Contact us for further information.

How can you help me get the best deal?

As we have the largest fleet of company cars across the UK, we can secure unrivalled buying power and discounts to ensure you get the best rates possible. The economies in using our own extensive list of dealerships are as follows:

  • Discounts and manufacturer bonuses
  • We gain benefits from purchasing hundreds of cars through our dealers
  • Commitment to after sales service
  • The influencing power that we have through our dealer network

Can I get my branding on my vehicle?

Yes you can. Part of the service we offer is to provide you with a facility to add vehicle branding/sign writing and remove this at the end of the contract. We have access to a wide network of reputable companies that can do this for you. All you need to do is Contact us and we can do the rest. Alternatively, we can work with you and your existing suppliers.