Car Leasing FAQ

Contract Hire

Contract Hire is ideal for companies who don’t want the financial risk of running their own vehicle fleets and who are looking to reduce the administration burden of buying, maintaining and disposing of their vehicles.

With Corporate Fleet Care Ltd the user specifies the anticipated annual mileage and hire period, then pays a fixed monthly rental.

Under a full maintenance agreement the customer would only be responsible for fuel, insurance, and accident damage. All other various services, i.e repairs, replacement tyres etc. would be covered under the agreement.

What are the benefits?

•    Fixed monthly rentals
•    Rentals can be offset against tax
•    Agreement can be tailored to your budget
•    You have the benefits of a vehicles use without ownership
•    No disposal problems
•    Off balance sheet funding

Contract Purchase

This method of financing was introduced to alleviate the burden on companies who were unable to reclaim the VAT on their monthly payments and to overcome the cost of corporation tax implications for cars costing more than £12,000.

The difference between Contract Purchase and Contract Hire is that you can buy the vehicle at the end of the contract period by paying a ‘balloon payment’

The key benefits to your company

•    Fleet financing can be on or off the balance sheet
•    There is no VAT on the finance element of the monthly payment although VAT is charged on any additional services
•    Fixed Interest means easier cash flow budgeting
•    You can claim Capital Allowances

Personal Contract Hire

Personal Contract Hire is becoming ever popular, with individuals identifying the benefits of Personal Contract Hire.

Contract Hire is simply like hiring a car over a fixed period of time. All you need to do is pay a monthly fee over the agreed period. Once the contract is up you simply return the car. Then you can walk away or take out a new contract, whichever you prefer.

The benefits of Personal Contract Hire

•    Fixed monthly payments to suit your budget
•    No depreciation or disposal issues to contemplate

Personal Contract Purchase

Personal Contract Purchase, is the great new way to finance the car you want, with the payment flexibility you desire.

A ‘balloon payment’ is agreed, but not paid until the end of the contract. The amount of the ‘balloon payment’ and the amount you wish to put down as a deposit are then set against the invoice value. Your monthly payments are then based on the remaining balance.

The benefits of Personal Contract Hire

•    The one off lump sum (Balloon Payment) can reduce your monthly outgoings therefore making your choice of car a lot more affordable
•    Tailored payment plans to suit your needs

Frequently Asked Quesions about Contract Hire / Personal Leasing     

Q.    Can I buy the vehicle at the end of the contract?
A.    Yes. There are no restrictions for personal contract hire, but business users would need to buy the vehicle through a third party.

Q.    Can I terminate the contract early if I want to?
A.    Yes. You may terminate the contract at any time before the due date but this may incur penalties. We would endeavour to keep any costs to a minimum.
     
Q.    Can I swap the vehicle for any other, mid-term?
A.    Yes. CFC can organise this for you, but the original contract must be terminated and therefore charges may apply.
     
Q.    Where do I take the vehicle for servicing?
A.    To a nominated garage local to you. Vehicles must be serviced by a dealer for the specific make of car on contract hire or personal lease.
     
Q.    Can I change the contract terms and mileage mid-term?
A.    This is possible under certain types of contract. Advice will be given at the time of request.
     
Q.    What happens if I exceed my contract mileage?
A.    An excess mileage charge will be sent to you in the form of an invoice at the end of the contract.
     
Q.    Who is responsible for insuring the vehicle?
A.    The vehicle must be insured by the user on a fully comprehensive basis.

Q.    Can the car be supplied by my local dealer?
A.    It is possible if the dealer is able to work to our terms and conditions, we would negotiate the necessary discounts with them.
     
Q.    What happens if the vehicle breaks down?
A.    If the vehicle is covered by a non maintenance contract, breakdowns are normally covered under the manufacturers warranty, but on a maintenance contract the vehicle would be supplied with full roadside assistance. A drivers pack is provided with every vehicle which explains fully how to treat every type of vehicle breakdown