A flexible business contract which can be settled early.
With a finance lease you choose to pay either the entire cost of the vehicle including interest charges over an agreed lease period or opt to pay lower monthly rentals with a final payment based on the anticipated resale value of the vehicle. The user benefits with a fixed cost but does take on the administration and operating risks, such as unexpected maintenance repairs and losses in residual value.
At the end of the contract you can continue to operate the vehicle for a nominal fee. Ownership remains with the leasing company for the duration of the contract, but the car does appear on your balance sheet with the capital element of the outstanding rentals representing a liability. Some or all of the rental charge can be offset against taxable profits.
Features and benefits:
- Choose from any make or model of vehicle (car or commercial), new or nearly new
- There are no mileage restrictions
- Contract periods can be selected from between 24 months and 60 months, with or without a balloon payment at the end of the contract (subject to the age of the vehicle at the start of the contract)
- Fixed monthly rentals allow for accurate monthly budgeting
- VAT Registered companies are eligible to reclaim 50% of the VAT on cars and 100% on commercial vehicles. This is only possible if the mileage was completely for business use and the vehicle has no private miles.
- You retain 98% of any equity in the vehicle after paying the final residual/balloon payment (if applicable)
- There is no early settlement penalty if you choose to end the contract early
- No damage clause means you avoid damage recharges from the finance company at the end of the contract
Things to be aware of:
- You do not have the option to own the vehicle as it must be sold to a third party as the end of the agreement
- You bear all the running costs for the vehicle
- You must have fully comprehensive vehicle insurance
- Ownership of the vehicle remains with the leasing company for the duration of the contract.
- There are various options available at the end of contract. There include refinance, sale, part exchange, providing flexibility at that time.