There are huge financial advantages for many businesses to obtain their vehicles through a contract hire arrangement. Often called an operating lease, this is a 1 - 5 year rental contract. These agreements are remarkably varied and can be tailored to the exact circumstances and financial strengths of each business client.
The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).
On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally 'off balance sheet funding' (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
T: 08000 199405
F: 01524 781417
Lakeland Vehicle Solutions
Clawthorpe Business Centre
Burton in Kendal
Lakeland Vehicle Solutions are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 712728
Registered in England & Wales with company number : 07433876 | Data Protection No : Z7212672 | VAT No : 856992853
Registered Office : Lakeland Vehicle Solutions Ltd, c/o Meiring CCA, Unit 1 Strands Barn, Strands Farm Lane, Hornby
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