Contract Hire

Contract Hire from Carlians

Considering your options?

Whatever the size of your company car fleet, the way in which it is funded can have a major impact on your overall financial performance. Our aim is to guide you through the various options and to show how Carlians Vehicle Leasing may be able to help you.

So what’s happening in the company car market?

Sales of new company cars continued to rise between 1992 and 1998, leading to an all time high of 1.22 million, following a fall in replacement cycles then continued growth in the economy. There are now over 3 million company cars on the UK roads, accounting for over half of all new car sales each year. This trend is set to continue, with Fleet Managers predicting a growth of between 1% and 2% in new car purchases over the next 12 months, with particularly strong growth in the service sector.

Company cars are now newer, of higher value, do more mileage, are more reliable and are replaced more often than ever before. Following the Chancellor’s budget in March 2000, it is clear that the company car is here to stay.

The growth of contract hire

In 1980, just 5% of the UK’s company cars werecontract hired. Today the figure is over 40% and rising, as many financial experts opt to fund their fleets using contract hire, taking advantage of the numerous cost-saving and administrative benefits.

How does Contract Hire work?

The funding of company vehicles, regardless of fleet size, can be a significant drain on financial and human resources, especially at a time when resale values are increasingly volatile. Contract hire can remove both the financial and administrative burden from your business. It can deliver a tax-efficient form of funding which eliminates risk and smooths cashflow.

Your company hires a vehicle from us for a pre-determined period at a fixed monthly rate.

We retain ownership and at the end of the fixed period the vehicle is simply returned to us.

The single, fixed monthly rental takes into account the cost of the car, its rate of depreciation, the length of the contract, mileage and any additional services you may wish to build in.

The majority of our customers choose to include maintenance cover, with full RAC breakdown and recovery service, keeping drivers on the road without involving the company in complex or costly administration.

The benefits of Contract Hire

Low initial payment, typically equal to 3 monthly rentals.

The economies of scale available from a supplier which is purchasing in excess of 27,000 vehicles a year and spending over £40 million per annum on maintenance.

Currently off balance-sheet funding as all ‘risk and reward’ remains with Lex Vehicle Leasing. Rental allowances typically provide accelerated tax benefits.

We reclaim the VAT on the purchase of the vehicle, and pass that saving on to you in the form of lower monthly rentals. Removes disposal risk and protects your future profits.

A maintenance-inclusive contract will remove the inherent risks associated with running a fleet of vehicles.

Your monthly fleet outgoings are fixed and incorporate realistic running costs, giving you greater budgetary control.

Improved gearing.

Lines of credit can be better utilised for investment in your core business.

Flexible contracts to reflect the changing nature of your business.

Peace of mind.