Contract hire is a popular funding option to finance fleets of all shapes and
sizes. You lease the vehicles required from your lease provider for a fixed
monthly rental over a fixed term, usually 2-5 years and for an agreed
contractual mileage. At the end of the term you return the vehicles and
providing there is no excess mileage or damage to the vehicles there is
nothing further to pay. You can also include a maintenance contract over
the same period, paying a fixed monthly amount to cover servicing, tyre
replacement, maintenance and repair costs.
Funding by contract hire means you are not exposed to losses on resale as the residual value risk sits with the lease provider. Therefore your costs are fixed over the contract term (subject to excess mileage and end of contract damage charges) allowing you to budget effectively. All you need to decide is the length of the contract and expected mileage and we will look after the rest.
The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).
On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally 'off balance sheet funding' (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
T: 01702 410 470
Planet Leasing Limited
91-93 Leigh Road
Planet Leasing Limited are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 688093. Planet Leasing Limited is an Appointed Representative of AutoProtect (MBI) Limited which is authorised and regulated by the Financial Conduct Authority for Insurance Mediation, their reference number is 312143. You can check this on the FCA Register by visiting the www.fca.org.uk or by contacting the FCA direct on 0300 500 8082
Registered in England & Wales with company number : 06160177 | Data Protection No : Z9866952 | VAT No : 938 0368 07
Registered Office : 601 London Road, Westcliff-on-Sea, Essex, SS0 9PE
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