After paying an initial
deposit the balance plus the interest is repaid by equal monthly installments
for a fixed period of time – At the end of the agreement you (the hirer) become
the owner of the car – VAT is not added to the repayments – If this facility is
taken up through a business the car will be classed as asset and its value is
shown on the Balance Sheet – The interest payable is tax deductible – For
writing down purposes Hire Purchase is treated the same way as outright
purchase.
Contract Purchase (PCP)
Treated very much like a Hire
Purchase but with a Guaranteed Future Value (GFV) lump sum at the end of the
agreed period –
A deposit followed by equal monthly payments then the following options apply:
1) Pay the GFV and keep the car. The car is now yours.
2) Part Exchange the vehicle. You either get the minimum value for the car
(GFV) or more and if any surplus, this amount can be used as a deposit on your
next vehicle.
3) Or, hand the car back to us and have no more to pay*.(*A pre-determined
mileage is written in to the agreement. If this mileage is exceeded then a
charge per mile applies and/or if any repairs are required).
Lease Purchase
A form of Hire Purchase but
aimed at Business Users – It operates in exactly the same way as Hire Purchase
but Lease Purchase allows more flexibility by offering the option of a *Balloon
payment at the end of the payment period.
*Lump sum at the end which reduces the monthly payment. Interest is also
payable on the Balloon payment.
Outright Purchase
If you have the money already
and don’t require any finance – just send us the cheque!! – We are quite happy
to sell to you direct outright – All we need is cleared funds before we deliver
the vehicle to you.
Contract Hire
Very similar to a Finance
Lease – The Vat benefits are the same – The difference is: at the end of the
contract you hand the vehicle back to us (A pre-determined mileage per annum is
agreed at the outset and a charge per mile will be made of any mileage excess.)
Finance Lease
With a Finance Lease you (the
lessee) do not become the owner of the vehicle – VAT is payable on the initial
rental and all the subsequent rentals including (if applicable) the lump sum at
the end – If you are Vat registered the Vat can be reclaimed (Car – 50% of the
Vat reclaimable if vehicle used for private purposes as well as business
purposes; Van – 100% of the Vat reclaimable ) – The unclaimed Vat and the
rental can be offset against the taxable profits of your company – There is a
limit on the amount of the rental that can be offset on cars. With cars up to a
value of £12,000 the full 100% can be offset. Over£12,000 then a percentage is
used. Vans 100% can be offset (no value limit) – At the end of the lease the
vehicle is sold to a third party and the proceeds less 5% (as a general rule)
are retained by you – Vehicles funded through a Finance Lease appear on the
balance sheet.
Are you looking for an alternative way to raising money for your business? Banks can be one dimensional and are limited to what they can do.
Please make contact on 01925 212318 and we may be able help you.
Please contact us today on 01925 212318 if you
require more information. We will be more than happy to run through the
facilities that could be made available to you.
Financial Conduct Authority.
We are an appointed representative of RFL Credit. ICO: Z2306171.
Compliance:
Please follow this link to our compliance procedures
regarding: