Used Car Finance Investigated by CompuCars

Contact Hire offers a trouble free way to run business vehicles.

The lender looks after all the administration including disposing of the car when your contact is complete. Monthly rentals are subject to VAT.

A maintenance option is also available and will normally cover routine maintenance, emergency assistance, road fund licence and provision of a relief vehicle in the event of a mechanical breakdown. Where maintenance is chosen, up to 100% of the VAT may be recoverable on the maintenance payments. Fixed monthly costs allow you to budget more accurately.

A Checklist of the Main Benefits

The amount of the VAT on the payments that you will be able to reclaim will vary. If the vehicle is only used for business use then a maximum of 100% will be reclaimable, however if any private use is required the amount is reduced to 50%.

Leasing

Leasing is an option traditionally used by VAT registered businesses. With a Lease (unlike Contract Hire) you share in the profit or loss on the sale of your car at the end of the agreement. Finance Leasing has the same tax position as Contract Hire. A Finance Lease may or may not have a balloon final rental. At the end of the term you sell the vehicle (on behalf of the finance company) and will usually be rebated between 90-99% of the sale proceeds (less the final balloon rental if you have not yet paid it). If you do not wish to sell the vehicle at the end of the agreement you can continue to use it by entering the 'secondary rental period' which usually consists of small annual rentals about 1% (+ VAT) of the vehicles original price.

A Checklist of the Main Benefits

Explore other Finance options explained by CompuCars

For further details contact your chosen dealer.