We offer a comprehensive range of finance packages on NEW and USED vehicles, contact us for more information and a quote!
PCP - Personal Contract Purchase
Personal Contract Purchase (PCP) is a new product developed to enable individuals to finance their vehicle whilst still retaining some or all of the benefits associated with a company car.
As the agreement is written in your name the normal "benefit in kind tax liability" doesn't apply. This facility can also be offered to those employees not normally entitled to a company car. Low deposit followed by a fixed monthly charge means that is easy to budget for and it is possible to provide all-inclusive maintenance and breakdown packages.
Who Owns the Vehicle at the End of the Agreement?
The vehicle is supplied for a set period of time at a fixed rental. At the end of the agreement the driver may purchase the vehicle by paying the balloon payment (guaranteed future value) or simply return it to the finance company.
Contract Hire with Maintenance
This is a simple Operating Lease that includes full maintenance, servicing and road fund licence. It provides a complete fixed cost motoring package, leaving you free to concentrate on running your business.
Cashflow Benefits
With a low initial outlay, normally expressed as monthly rentals in advance, followed by fixed monthly payments, you know exactly what your monthly motoring costs will be. Contract Hire may also be classified as "off balance sheet" which may improve the financial ratios in your accounts (gearing).
Tax Implications
As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle. What's more, all the VAT on the maintenance element of the rental can be recovered, irrespective of vehicle use.
Who Owns the Vehicle at the End of the Agreement?
At the end of the agreement you may arrange a brand new vehicle to replace your current vehicle, handing the old one back to us. We will arrange for vehicle disposal.
Hire Purchase
Hire Purchase is a simple and popular way of purchasing a vehicle, with worthwhile tax advantages for businesses. If ownership is a priority, this is an extremely cost effective method of borrowing.
Cashflow Benefits
Paying an initial deposit, calculated as a percentage of the total cost this is followed by fixed monthly repayments; which allows you to budget monthly expenditure precisely in advance.
Tax Implications
Business users may claim tax relief on the interest charged. The vehicle is also classified as an asset, which allows it to be written down against taxable profits by 25% or £3000 (maximum per annum).
Who Owns the Vehicle at the End of the Agreement?
At the end of the agreement, which may be from 1 to 5 years, you become the outright owner of the vehicle.
Lease Purchase
This is similar to Hire Purchase but has greater flexibility.
Cashflow Benefits
The initial deposit is normally expressed as monthly payments in advance and is much lower than traditional HP, and a final lump sum or balloon payment (sometimes called a residual value) is usually included. This has the effect of reducing the amount of the monthly payments, thereby aiding cashflow.
Tax Implications
The tax and financial benefits are the same as hire purchase, but the payments can be structured to suit a business’s particular cashflow needs.
Who Owns the Vehicle at the End of the Agreement?
After making the balloon payment, ownership of the vehicle can be taken, or it can be part exchanged - using any surplus equity towards a deposit for a new vehicle.
