Contract Hire is an ideal product for companies who don't want the financial risk of running their own car and van fleets, and who want to reduce the administrative load of buying, servicing and disposing of their company vehicles.
What are the benefits of contract hire?
1. Fixed monthly costs
Contract hire is a fixed-cost form of motoring. For a set monthly payment, you get the use of a vehicle for an agreed duration and mileage that suits your business. The fee takes into account the vehicle’s price when hired, its forecast mileage during the contract and its estimated residual value at the end. As long as you have not exceeded the mileage and the vehicle is in a fair condition, you just return it at the end of the contract, with no further cost. For an extra monthly fee, Sutton Park Fleet can take care of nearly every hassle associated with car ownership, whether it is maintenance, servicing or replacement vehicles.
2. No risk
Most vehicles will lose value from the moment they leave the showroom. In a contract hire deal, you return it at the end of the contract period, and Sutton Park Fleet take the residual value risk. If you include things like maintenance and servicing, you are also protected from any unseen rise in these costs.
3. Free up capital
Leasing a vehicle instead of purchasing it means you are not tying up capital in a rapidly depreciating asset. You can invest the money that you are not paying upfront in growing your business or reducing debts.
4. Off balance sheet funding
Vehicle leases do not have to be shown on a balance sheet, which will improve a company's liquidity ratio, gearing and return on assets.
5. Purchasing power
While your business may have a fleet of 5, 25, even 100 vehicles, Sutton Park Fleet are used to buying thousands each year. We can negotiate great deals with manufacturers and pass the savings on to you in the form of a very competitive leasing rate.
6. Tax Regulations – Cars
- 100% of the Lease payments for cars up to 130g/km can be offset
- 85% of the Lease payments for cars over 130g/km can be offset
- 100% of the Maintenance element is also allowable
7. Tax Regulations – Vans
- 100% Lease payments on all vans are allowable against taxable profits
- 100% of the Maintenance element is also allowable
8. VAT Implications
- 100% of the VAT element on the rental can be reclaimed on vans
- 50% of the VAT element on the rental can be reclaimed on cars.
- 100% can be reclaimed if the car is solely used for business purposes.
- 100% of the maintenance element can be reclaimed for both Cars & Vans
At Sutton Park Business we have various funding options available to our business customers, as highlighted below.
