How should you fund your vehicles?
There are many ways to finance your vehicles, and our business is helping you make the right choice. We have a range of funding methods for businesses and individuals, as detailed below.
Funding methods:
Contract Hire is a method of leasing a vehicle based on a set term and mileage. As opposed to owning, taking the residual value risk, and dealing with the resale this form of finance offers simple, fixed cost motoring.
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Hire purchase is a simple method of buying a vehicle on deferred payment terms. Unlike a lease the residual value of the vehicle is not taken into account. Instead your monthly payments are determined by the retail price of the vehicle, the size of the deposit and the length of the contract.
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Similar to a Hire purchase, though with a balloon payable at the end of the agreement based on the residual value of the vehicle. This final payment is obligatory so you are unable to walk away at this point. A typical lease purchase agreement will last between 2 and 4 years, though with most companies it is possible to settle the agreement at any stage.
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Finance Lease is a method of financing a vehicle where you choose to pay either the entire cost of the vehicle, including interest charges, over an agreed period or pay lower monthly rentals with a final payment based on the anticipated resale value of the vehicle. With a finance lease you never take ownership of the vehicle and do take the risks of residual value. In some cases it can prove an effective funding method, though is a form of finance commonly mis sold through poor understanding.
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A mini-lease offers the same flexibility as daily rental, but over a slightly longer term. Minimum rental periods are 1 month and payments are fully inclusive of all maintenance and associated costs. Commonly used to cover seasonal peaks in demand, and for new starters probationary periods. In fleets of 10 + vehicles it can be useful, dependent on staff turnover, to run 10% of your fleet in this way so as to avoid early termination costs associated with vehicle leasing arrangements.
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As with Contract hire for business use, this form of finance is a very popular method of funding a car. Typically used by individuals in receipt of a car allowance. As opposed to owning, taking the residual value risk, and dealing with the resale this form of finance offers simple, fixed cost motoring.
Contract Purchase replicates Contract hire in many ways, though has an optional 'guaranteed future value' represented as a balloon payment (final payment at the end of the contract.)
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Outright purchase, or simply buying vehicles, is a popular choice with smaller companies, but there are associated risks. If a company buys its own vehicles it becomes responsible for maintenance, repairs, insurance and disposal.
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Available to Limited companies only.
Our daily rental partnerships enable us to offer the best of corporate daily rental. We have a preferential tariff as available to download on this page. Importantly the costs are quoted on an all inclusive basis and vehicles can be delivered anywhere in the UK with 2 working hours notice. Should your business use daily rental, talk to us.
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