Contract leasing is used to describe a long term, usually 3 year rental of a vehicle. There is a huge demand for vehicles in the contract hire and leasing sector. The UK contract hire and leasing industry is the most successful and best managed among all the other industries, worldwide. This industry is driven by UK’s tendency for company funded vehicles for business- or perks. The companies rent vehicles to business users, normally including maintenance and repair plan for the period of the user’s choice. The vehicle remains in the property of the Lessor (Contract hire company) and never becomes the property of the lessee (the company renting and using the vehicle). Apart from the major players who concentrate mainly on corporate fleets and affinity car hire schemes, a significant broker channel has emerged. Brokers exist as aggregators and attract fee income based on arbitrage by finding the lowest cost leasing supplier for a particular make and model. Alternately one can also try online vehicle leasing sites like www.fbcontract.so.uk to find and lease the vehicle of your choice, this way you can avoid the broker’s costs.

 

Here are some of the reasons why contract leasing is more beneficial than vehicle purchasing:

 

Release Capital – If you are currently purchasing your vehicles through your own funding, you are inadvertently tying up a valuable proportion of your company’s financial resources. Contract leasing releases these funds for more profitable use.

 

Accurate Budgeting – With contract leasing, all costs are calculated by experts and built into a fixed monthly payment. Vehicle costs can be forecast accurately for up to five years. Paperwork is almost eliminated and budgets tightly controlled.

 

Tackles Depreciation – Owing to our buying power, we can purchase vehicles at cheaper rates. Efficient vehicle disposal always enables our Finance Houses to accurately assess resale values. Only the minimum depreciation is passed on to our customers, resulting in realistic rentals.

 

Improves Cash Flow – Contract leasing will improve your company’s cash flow through low initial outlay.

 

Freedom of Choice – We can supply all makes of cars and vans at competitive Contract leasing rates. You choose the model, colour, specification and accessories to suit you. We then offer expert and unbiased advice on all makes and models that might meet your needs and budget.

 

Off Balance Sheet Funding – Contract leasing is classed as an operating lease, which means that the vehicles do not show as depreciating items on your balance sheet. Rentals are classed as a revenue expense and are shown in the profit and loss account.

 

Reduces Administration – If your management and staff is currently weighed down with time consuming vehicle administration contract leasing releases them from this burden, so they can achieve more profitable objectives. Contract leasing significantly reduces paperwork. Road fund licence supplied and renewed automatically.

 

Enhances Company Image – With contract leasing you will always have modern and presentable vehicles. Contract leasing will also give you a disciplined replacement program.

 

VAT Benefits – Contract leasing has many VAT benefits. Our Finance Houses can reclaim the VAT on the purchase price of the vehicle and pass on these benefits to our customers. Also, once the vehicle is on the road, you can claim back 50% of the VAT on the finance element (if the vehicle is available for personal use or 100% if only available for business use) and 100% of the VAT on the maintenance element of the rental payments.

Peace of Mind – With monthly payments fixed over the entire contract period and a range of optional extras, Contract leasing takes away the worry and trouble of managing your company cars and vans.

 

A Selection of Cost Options- Breakdown recovery service, including home start and relay, Replacement vehicle for mechanical/accident breakdowns, Routine maintenance and unscheduled mechanical repairs including replacement tyres, batteries and exhausts.

 

If you want to avail of all these benefits of contract leasing visit us at www.fbcontracts.co.uk

 

Bibliography:

http://www.ashcontracts.co.uk