Personal contract hire explained
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to give you a clear understanding of who each funding option is suited to1. Full details of 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.
You get the option to buy the vehicle at the end of the contract, trade it in for a new one or simply return the vehicle to us, with no further payments due.
As you cannot reclaim the VAT on the monthly payments, Personal Contract Hire can often suit non VAT registered companies.
To find out if Personal Contract Hire would suit your organisation, call us now on 0870 224 2772 and we can help you make the decision that's right for you.
2. Key benefits of personal contract hire
- Personal Contract Hire allows for accurate monthly budgeting
- Personal Contract Hire provides improved cash flow
- Personal Contract Hire ensures you have a minimum capital expenditure
- Personal Contract Hire provides a fixed interest rate
- Personal Contract Hire means that capital allowances are available
- Personal Contract Hire provides ownership of vehicle
- Personal Contract Hire ensures no depreciation risks
- Personal Contract Hire ensure there are no vehicle disposal problems
- Personal Contract Hire provides reduced administration
- Personal Contract Hire provides on-going advice/support
- Personal Contract Hire means that road fund license provided
- Personal Contract Hire provides breakdown rescue cover
- Personal Contract Hire provides a replacement vehicle in case of breakdown
- Personal Contract Hire provides fixed charge maintenance
- Personal Contract Hire means that VAT is chargeable on services
- Personal Contract Hire means that VAT is recoverable on services
- Personal Contract Hire provides optional GAP insurance
3. Your options at the end of the contract
The balloon Rental is due - do you want to pay it now?
Do you want to finance the vehicle for a further period?
You can get a quotation to re-finance your final rental amount (subject to this being over £2,5000) from your Network franchisee. This can be for any tiem period up until the vehicle reaches 60 months old. If the quotation is acceptable, sign the form and return it to your Network franchisee. They will then get documentation to cover this new period drawn up for you to sign.
The Refinance period will expire - This example assumes that no further refinance is possible, although it could go through the cycle again!
Tha Balloon Rental will be invoiced for payment by DDM
Do you wish to continue to use the vehicle?
Once the Balloon rental is paid, you can continue to use the vehicle for as long as you wish, although you can never actually own it. We will maintain the agreement by invoicing you for the secondary (peppercorn) rental amount, which is payable annually in advance. We will continue to invoice the peppercorn until you sell the vehicle and advise of the sale as in
The vehicle must be sold. Will you sell it?
You must sell the vehicle as our appointed agent to any party that is not the company that hired the vehicle, any Director or member of their family. Once this is done, you need to send Netowrk a copy of of the sales invoice and 2% of the sales proceeds. You will retain 98% of the sales proceeds as a rebate against the final rental payment
Contact your Network franchisee or Network direct and we will help dispose of the your vehicle for you
Your Network franchisee will be pleased to review your options for your next contract