Your funding options explained
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to give you a clear understanding of who each funding option is suited to- Business contract hire
- Finance lease
- Personal contract hire
- Personal contract purchase
- Lease purchase
1. Business contract hire
Business contract hire is a tax efficient funding method where you hire rather than own the vehicle, paying fixed monthly charges for the duration of the contract.
Some key benefits of business contract hire include:
- VAT recoverable on monthly rentals
- allows for accurate monthly budgeting
- provides improved cash flow
- ensures you have a minimum capital expenditure
- provides a fixed interest rate
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2. Finance lease
Finance lease is a tax efficient option where you can choose to fund the entire cost of the vehicle, plus interest, over a set period or pay lower monthly rentals and then a final payment based on the anticipated resale value of the vehicle.
Some key benefits of finance lease include:
- VAT chargeable on rental
- VAT recovered on purchase cost by Network and passed on to customer in lower rental
- reduced administration
- on-going advice/support
- optional GAP insurance
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3. Personal contract hire
Personal contract hire helps you to purchase a vehicle over a set period of time and at fixed monthly costs, without taking the depreciation risks normally associated with ownership.
Some key benefits of personal contract hire include:
- ownership of vehicle
- no depreciation risks
- no vehicle disposal problems
- reduced administration
- on-going advice/support
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4. Personal contract purchase (PCP)
Personal Contract Purchase, also known as PCP, enables the individual, rather than the organisation, to lease a vehicle over a set period of time and with fixed monthly costs.
Some key benefits of personal contract purchase include:
- provides improved cash flow
- ensures you have a minimum capital expenditure
- provides a fixed interest rate
- ownership of vehicle
- no depreciation risks
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5. Lease purchase
Lease Purchase spreads the vehicle payments over several years and enables you to own the vehicle at the end of the contract.
Some key benefits of lease purchase include:
- ensures you have a minimum capital expenditure
- provides a fixed interest rate
- capital allowances are available
- ownership of vehicle
- reduced administration
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