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Finance Lease

Ideal for VAT – registered companies who want to handle the administration of their vehicles, and have the asset shown on their balance sheet. A VAT – beneficial option where the hirer can choose to pay the entire cost over the agreed lease period, plus an interest charge, or pay lower monthly rentals during the lease period with a final payment based on the anticipated resale value of the vehicle.

The benefits of Finance Lease:

  • Ownership at the end of the contract
  • Fixed monthly costs
  • Flexible contracts
  • Low initial outlay
  • Business capital not tied up in a depreciating asset
  • VAT on rentals reclaimable
  • Road fund license included for the full contract length

Please see attached chart which gives you an overview of product features. However please feel free to contact us to obtain further in depth information.

  Contract Hire Contract Purchase Hire/Lease Purchase Finance Lease PCH/PCP Outright Purchase
Accurate monthly budgeting X X X X X  
Improved cash flow X X X X X  
Low Deposit X X   X X  
Fixed interest rates X X X X X n/a
Capital allowances available   X X   n/a X
Ownership of vehicle   Optional X   Optional X
VAT recoverable on rentals X (1)     X (1)    
VAT recovered by lease company to reduce rental X     X    
No depreciation risks X X     X  
Note 1: Only 50% of the VAT relating to the finance element is recoverable if there is private use of the vehicle. If the vehicle is only used for business purposes 100% of the service element VAT is recoverable on contract hire only.

Running the Vehicle

  Contract Hire Contract Purchase Hire/Lease Purchase Finance Lease PCH/PCP Outright Purchase
Vehicle disposal X X     X  
Reduced administration X X Optional Optional X Optional
Road fund licence provided X X     X (2)  
Breakdown cover Optional Optional Optional Optional Optional Optional
Relief vehicle Optional Optional     Optional  
Fixed charge maintenance Optional Optional     Optional  
Payment Protection Optional Optional Optional Optional Optional  
VAT recoverable on services X X     X (2) X
Optional GAP insurance X X X X X  
Note 2: Road fund licence is provided for the first year only.

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Car leasing systems by CALAS