Types of Finance

There are a multitude of options available to both companies and individuals. Here is a brief explanation of the key features. Please note certain offers on this site may only be available to businesses, this is because of restrictions placed on us by the manufacturers.

Please note some changes have been proposed in the 2008 budget that will change the information contained in this page, for an overview of the effects of the 2008 budget please click HERE

For Business

Contract Hire

Think of this like a long term rental. All the hassle is taken away, we buy the vehicle through the funding company, deliver it to your door and at the end of the rental period you simply hand the vehicle back and get another one delivered. You pay a deposit followed by fixed monthly amounts, and cannot ever own the vehicle - Simple!

The drawbacks of contract hire are that you need to predict your future mileage and the contract hire company will charge excess mileage if you go over the agreed mileage, and also if the vehicle is not returned in good condition.

Contract Purchase

Similar to Contract hire, but with potential tax benefits for certain types of companies or vehicles. Again you pay a deposit followed by fixed monthly payments, and the vehicle can just be returned at the end of the period. With this form of finance you can if you wish buy the vehicle at the end of the period – Why you would want to do this when you can have another lovely new car from us is beyond me!

Finance Lease (sometimes just called a Lease)

Similar to contract hire, we buy the vehicle for you, and you pay a fixed monthly sum. However the resale value is not guaranteed by the finance company, which means you pay the final rental (often called the balloon payment), and then when the vehicle is sold by the finance company you get a repayment of the sale proceeds (normally less a small % to cover administration). This can be a useful way of funding high mileage vehicles, or if you think you may wish to change the vehicle before the end of the term if using our variable rate option. In certain cases we can offer a plan to provide a guarantee to buy your finance leased car which then means it becomes essentially the same as contract hire.

The drawbacks are the end of contract payment ("the balloon") is not guaranteed - however we set the balloon using the same trade guides as the contract hire companies, who typically will use a figure of 90% of the expected end of contract sale price as they take the risk on resale. This means that often finance lease is cheaper than contract hire, and we can help take away the end of lease hassle as well.

For Individuals

Contract Hire

Available as for businesses but VAT is charged on the entire rental. This can still be cost effective as the lease company recover VAT on the purchase price of the vehicle, which effectively reduces it’s cost. You never own the vehicle

Contract Purchase

As above, but VAT is not charged on the payments (it has also not been recovered on the purchase price by the finance company), and you have the option to buy the car at the end of the agreement, if you have lost the leave of your senses and don’t want another wonderful new car from us.

Hire Purchase

Essentially the same as contract purchase, but the final payment (balloon) is not always guaranteed.
For a more detailed explanation of tax treatment for you boring accountant types click here