Funding

Leasing

Finance Lease

Finance lease is ideal for non- VAT registered business owners looking for low initial deposit and maximum flexibility. Finance lease is a tax efficient option where you choose to pay either the total cost of the vehicle including interest charges over an agreed period or opt to pay lower monthly payments with a final payment based on the anticipated resale value of the vehicle. You pay a relatively small initial deposit (typically 3 months rentals).

With Finance Lease, whether you are VAT registered or not, you pay the VAT monthly but, if registered, can claim it back quarterly. Monthly payments can be offset against taxable profits

At the end of the term, with a finance lease agreement, you are legally obliged to sell or part exchange the vehicle as the HMRC will not allow you the tax advantages of the lease as well as final ownership. You can sell the vehicle to whom you please but can retain typically 95-98% of any profit, the finance company being paid back the residual value plus a small percentage of any profit. You can use this profit as a deposit on your next vehicle if you wish.

If you wish to keep the vehicle at the end of the term, you can normally request a secondary or peppercorn rental figure from your finance company which you then pay annually instead of monthly which allows you to keep the vehicle for up to a further 2 years. This rental could typically be anything between one and three months’ current rental.

Features and benefits of Finance Lease include:-

  • Flexible deposit and term
  • VAT on monthly rental reclaimable
  • Rentals allowable against taxable profits
  • Final Balloon profile option to reduce monthly payments
  • Vehicle sold or part exchanged at end of agreement
  • Hirer typically keeps 95-98% of any profit
  • Requires annual mileage allowance to calculate balloon profile
  • No excess mileage charge
  • All Motorhound and Vehicle Strategies’ clients receive access to our unique vehicle and driver management software

 

Do you have more questions or want to talk to someone?

We are not a faceless internet company, we'd love to discuss your requirements, offer advice and answer any questions you may have regarding the purchasing your next car. We can help you get finance, arrange insurance and even manage your fleet! Call us on 01202 392141 or 07576 353636

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