Business Car leasing
Business vehicle leasing overview
We provide business leasing for Partnerships, Sole Traders and Ltd Organizations, supplying lease cars and vans throughout the UK.
One main factor about business leasing is the reduction in costs with only a small initial outlay. Many companies prefer leasing because there are no vehicle depreciation risks, they just return the vehicle at the end of the term to the finance provider.
Business contract hire is the most common lease used by companies as this type of lease enables the release of tied up funds for further effective use within a business generating the optimum cash flow.
A recent survey showed that approximately 70% of company vehicles are financed via business leasing, the reason for this being that new business’s are discovering the advantages of this form vehicle finance which is increasing daily.
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How are car leasing contracts calculated?
Car leasing and van leasing costs are calculated on the depreciation on a vehicle over a set term and mileage together with fixed interest charges assuming the customer does not exceed the mileage or create any damage to the car or van.
Business’s can choose whether to take a vehicle with or without maintenance.
If a business chooses not to take a maintenance package then it becomes the responsibility of that business to ensure that the vehicle is serviced in accordance with the manufacturer’s specifications and the vehicle is not returned to the finance provider with balled tyres.
A maintenance package does not suit all businesses but for many it provides a complete service which some prefer for peace of mind while also freeing up more admin time for other projects.
VAT and Business Leasing
Since 1995 as a result of the VAT laws and regulations which enable the finance companies to reclaim all the VAT back on the purchase of a vehicle. This reduced vehicle cost less the VAT is passed on to the business who is leasing a car or van.
If your business is VAT registered you can claim back up to 50% of the VAT charged on the finance of the vehicle and up to 100% the VAT charged on the maintenance applicable when the vehicle is for business use.
For vans and other commercial vehicles used exclusively for company purposes the hirer may claim 100% of the VAT on both the funding and the maintenance.
At the end of the agreement the car or van is usually collected by the funding company who would asses the vehicle for any damage for which there may be charge.
At the end of a contract a business may wish to extend the lease for a further period. Quite often finance companies are prepared to extend if it falls into their criteria assuming the vehicle is not too old at the time.
Create the right company image
Overall vehicle leasing has turned out to be a great asset to firms who like have set costs with no hidden extras and like to portrait a professional impression to other businesses when their representatives call on them. By changing vehicles every two or three years enhances this positive image and improves reliability with new vehicles.
1st4 leasing will be happy to provide further information about business leasing upon request and answer any questions you may have in connection with car leasing.
Call us today on 0344 561 7199 to find out more about our business leasing offers.