Contract Hire
Contract hire is ideal if your business prefers to hire rather than own. It is simply an agreement where a rental is paid in return for the vehicle over two, three or four years. It also relieves you of the time-consuming administration to selling it or worrying about its value in the future.

Furthermore, if you are a VAT registered business then a proportion of the rentals may be tax deductible. As contract hire is classified as an operating lease for current taxation purposes, it is regarded differently to 'purchase' contracts so that you may benefit from certain tax advantages.

1  Fixed cost motoring
2  Reduced administration
3  Low initial outlay
4  Low monthly payments
5  No responsibility for vehicle disposal
6  Reclaim 50% of VAT on monthly payments
7  Reclaim 100% of VAT on maintenance if applicable

1  No equity in the vehicle at the end of the agreement
2  Reclaim only 50% of VAT on monthly payments
3  Vehicles do not appear on the balance sheet

lease purchase
Lease purchase is a cost effective way for your business to own the vehicle. Contract periods range from two to five years and allow you to defer a proportion of the vehicle's value to the end of the agreement. At the end of the agreement you can own the vehicle.

Furthermore, if your business is not VAT registered, then lease purchase could be an even more attractive option.

1  Customer gains ownership of the vehicle
2  Low or nil initial deposit
3  option of eventual ownership
4  option of early settlement
5  Customer has equity in vehicle
6  Customer claims writing down allowance
7  No VAT on monthly payments

1  VAT not reclaimable
2  Customer bears risk of depreciation of vehicle

Hire purchase
Hire purchase is the simple and straight forward way to finance for your vehicle. You can purchase your vehicle over a period of two to five years. when all of the payments have been made, you own the vehicle out right.

1  Customer gains ownership of the vehicle
2  Low or nil initial deposit
3  option of eventual ownership
4  option of early settlement
5  Customer has equity in vehicle
6  Customer claims writing down allowance
7  No VAT on monthly payments
8  no balloon or final payment

1  VAT not reclaimable
2  Customer bears risk of depreciation of vehicle

personal contract purchase
personal contract purchase (pcp) is a popular method of funding where an individual leases a vehicle for a set period of time at a fixed monthly rate. at the end of the contract there is an optional balloon payment which the individual can pay to own the vehicle out right or they can simply choose to hand the vehicle back.

1  Low initial Outlay
2  Low monthly cost
3  No risk for depreciation
4  No VAT on finance repayment
5   Option to own vehicle
6  Fixed cost motoring

1  No or reduced equity on vehicle
2  VAT on new or qualifying vehicles not reclaimable

finance lease
Finance lease is a hire agreement with features specifically designed for the business user, and if you are VAT registered there may be even more financial reasons why leasing is for you.

Once you have chosen a new car you can decide on a period of between two and five years. When the agreement ends, and subject to the terms and conditions of the agreement being met, you may arrange to sell the vehicle to a third party.

As this is a lease, it is regarded differently to "purchase contracts" for tax purposes, enabling you to benefit from certain tax advantages. A proportion of all the rentals can be claimed as business expense against taxable profits and the proportion is dependant on the price of the car being leased.

1  Low initial outlay
2  Low monthly outlay. Hirer only pays for depreciation and     finance charges during the course of lease.
3  Finance charged on VAT exclusive price of new and qualifying     cars

1  No or reduced equity in the vehicle at the end of the contract.
2  VAT on rentals only 50% of which is reclaimable.
3  Vehicles appear on balance sheet as per SSAP 21
4  Hire takes risk of any loss on the sale of the vehicle.
5  Pay interest on outstanding Balloon payment