Benefits of Contract Hire for Business Owners

Companies can take advantage of vehicle leasing to create a regular turnover of cars, which improves vehicle/mechanical reliability and portrays a professional image in the business market with the minimum capital outlay. Upon your instruction and subject to credit approval 1st4 will acquire your vehicle on your behalf saving you valuable administration time.

Contract Hire facts and key features:
– Minimum outlay (usually equivalent to three monthly rentals) improves cash flow
– Frees up a large amount of working capital for other business projects
– This removes the risk of depreciation or of any time consuming disposal problems
– Costs are fixed ensuring maximum control for accurate monthly and annual budgeting.
– Fixed interest rates = inflation proof rentals
– Vehicles do not show on balance sheet
– Monthly rentals can therefore be offset against taxable profits
– Because leasing companies can recover VAT on qualifying car purchases the reduction in capital outlay is passed on to the customer in lower monthly rentals.
– VAT is charged on monthly rentals
– VAT is reclaimable on monthly rentals
– Road tax is included for the duration of the lease
– Fixed maintenance charges optional (Maintenance = routine services plus consumables under fair wear and tear such as tyres, batteries, exhausts, windscreen wipers etc)
– Fixed charges for breakdown rescue cover optional
– Fixed charges for replacement vehicle in case of breakdown or accident optional
– GAP (Guaranteed Asset Protection) insurance optional (covers the short fall between the write off value at time loss)
– VAT chargeable on services (maintenance)
– 100% of VAT recoverable on services (maintenance)
– Mileage on agreements can be rescheduled provided there is at least 6 months left before the agreement is due to terminate.
– Certain lease agreements can be extended
– Contracts can be on New and Nearly New VAT qualifying vehicles

Business Contract Hire