5 Reasons Your Business Needs To Contract Hire Vehicles
Posted in Insider News On By David Moffatt
Contract hire is the most popular funding solution in the UK, here are the 5 reasons your business needs to contract hire all their fleet vehicles.
For some business's choosing how they source company vehicles is a real pain. There are a number of different methods to choose from, all with their own pro's and con's. Contract hire is the most popular funding type in the UK. Here are the 5 reasons your business needs to contract hire:
Fixed Monthly Payments
Contract hire allows you to fix the cost of the vehicle over a set period of time. By setting the estimated annual mileage and contract term, the monthly payment is calculated. For an additional fee you can even include servicing, maintenance and replacement tyres within the contract hire payment. This gives total peace of mind, as you know exactly what the vehicle will cost each month - no nasty surprises!
2. Forget Residual Value Risk
From the moment a new vehicle is driven out of the showroom it starts to loose value....quickly! With a contract hire agreement the residual value risk is entirely with the leasing company. So no matter what happens with the residual value of the car, at the end of the contract hire agreement you hand the car back - no further charges.
3. Don't Tie Up Vital Capital
Cash flow is king for most business's, so why tie up vital capital in what is essentially a depreciating asset? Contract hire agreements only require a minimal outlay upfront, this is typically 3 or 6 times the monthly rental.
4. Claim Back The VAT
If your business plans to use the vehicle solely for business use, then you are able to reclaim 100% of the VAT. However, if the vehicle will be used for any personal mileage in addition, then the amount you can claim is reduced to 50%.
5. Stay Off The Balance Sheet
Vehicles funded on contract hire agreements do not have to be shown on the balance sheet. An accountants dream!
If you have any questions or just want some straight talking advice please feel free to call our team on 0151 728 4711 or visit Stable Vehicle Contracts.If you are considering changing your lease car or van in the near future why not join the thousands of subscribers who already receive our weekly newsletter. Each week we aim to send out a selection of the very best contract hire & leasing offers in the UK!