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Leasing Overview
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Business Leasing
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With Business Contract Hire the company will be entering into a contract with a Finance Company. You will be given the full use of the vehicle you choose for the contracted period of time.
During this time the business never owns the vehicle, it remains the property of the Finance Company. For use of the vehicle, you will need to pay the finance company a monthly rental.
The finance company will decide how much this monthly rental will need to be based on the cost of the chosen vehicle, the length of the contract and the residual value of the vehicle at the end of the contract. The residual value depends upon expected depreciation and includes how many miles the vehicle will have travelled, so there will be a mileage limit set out in your leasing contract.
Business Contract Hire
Advantages
Points to consider
With Finance Leasing the finance company will own the chosen vehicle and the business will pay a monthly rental to the finance company to use the vehicle for a contracted period of time. The monthly rental is decided upon by considering the initial value of the vehicle, the contracted lease period and the residual value of the vehicle.
At the end of the initial lease period, there may be a balloon payment to be made. 'Balloon payment' is the name given to the final sum of money owed to the finance company. The vehicle must then be sold to an independent third party. If a profit is made the business leasing the vehicle will be given a share. If the business wants to continue to use the vehicle they can enter into a secondary rental period. If this is the case for your business our Account Managers can provide you with more information.
Finance Lease
Advantages
Points to consider
With Business Contract Purchase the business will have the option to buy the vehicle at the end of your contract. The business will enter into a contract with a finance company relating their chosen vehicle. At the beginning of the contract, the Minimum Guaranteed Future Value of the vehicle will be agreed upon. This Value reflects how much the vehicle may be worth at the end of the contract and is set as a final balloon payment. It will depend upon various factors such as the length of the contract and the mileage the vehicle has been driven.
At the end of the contract you can choose to pay the value of the balloon payment and own the vehicle, or you can choose not to pay it and return the vehicle subject to condition and mileage.
Business Contract Purchase
Advantages
Points to consider
With a Business Hire Purchase agreement, you will be entering into a contract with a Finance Company. Here the Finance company will be the people who purchase the vehicle, then they will allow you to use the vehicle while your business pays monthly instalments over a contracted length of time to cover the total value of the vehicle. Usually, an initial deposit of higher value than the agreed monthly payment will be required. After this contracted time, when all the payments under the agreement have been made, the vehicle will then be owned by you.
Business Hire Purchase
Advantages
Points to consider
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Lease guides
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