Finance lease is a popular agreement for businesses needing cars, vans and commercial vehicles where contract hire is not suitable. It offers flexibility and tax advantages to eligible companies who require one or more vehicles but don’t have the accessible funds to pay for them up front.
How does it work?
If your company chooses to take out a finance lease on a brand new vehicle, you will be hiring it for a specified period of time (two or three years, for example) and make regular monthly payments to rent it.
Your business will be able to use the car or van without facing the high upfront cost of a new vehicle, handle the administration of the vehicle, and have the assets show on your company’s balance sheet.
At the beginning of the lease, usage parameters for the vehicle are agreed. Providing these restrictions are met, monthly payments and interest rates are fixed for the duration of the contract.
If yours is a VAT registered company, you can reclaim between 50% and 100% of the VAT payments depending on whether you are renting a car or commercial vehicle. If your company is not VAT registered, you can choose to spread the VAT costs across the term of the lease by incorporating it into your monthly rental.
Your payments can normally be offset against taxable profits (special rules apply to cars).
At the end of the contract the vehicle can either be sold by the user to an unrelated third party (some funders may handle the disposal in return for a small commission) or alternatively, the user can pay the outstanding “balloon payment” and operate the vehicle under a peppercorn agreement.
The main benefits:
Fixed payments for the whole agreement
Low up-front costs – for just a small outlay, you can use the assets immediately
Claim up to 50% of the VAT on cars and 100% on commercial vehicles (subject to being VAT registered)
Flexible repayment structure tailored to match your company’s cash flow
Fixed or variable interest options – you decide which suits you best
Tax advantages – VAT is payable on the rentals, not the purchase price, while payments can normally be offset against taxable profit (special rules apply to cars)
No penalty charges for additional mileage or damage at the end of the agreement
Although you will not own the vehicle, you will receive 98% of the sale proceeds if the vehicle is sold to a third party at the end of the agreement
Sale & Leaseback
A Sale and Leaseback arrangement is a valuable option for organisations that have historically purchased vehicles outright and are looking to switch to a leasing arrangement.
Hilton Vehicle Leasing will manage the full process on your behalf, providing a professional and cost effective transition from outright purchase to a funded arrangement.
How does it work?
With credit harder to secure and unpredictable vehicle residual values, many outright purchase fleets are considering sale and leaseback options, which frees tied-up capital from their vehicles. If you want to move from outright purchase but can't wait until your fleet renewal date, Sale & Leaseback is the answer. The process is as simple as it sounds. We calculate the value of each vehicle in your fleet - and buy them from you at market price. We then lease the vehicles back to you on Contract Hire, or offer a brand new vehicle replacement.
Sale & Leaseback helps you save money long-term. Your fleet will move off the company balance sheet as ownership transfers to Hilton Vehicle Leasing. This means potential tax savings for you. You also lose the financial risk associated with owning depreciating assets.
The main banefits:
Removes the financial risk associated with owning depreciating cars
Enables you to outsource maintenance and disposal risk
Fixed monthly payment includes maintenance and servicing
Simple, transparent process
Instant cash injection for your business
Potential tax savings
Facilitates easier budgeting and strategic planning
Reduces internal/administration costs
Flexible contracts adapt to your business changes
Will it work for my company?
If your company owns some or all of your vehicles outright, then the Sale and Leaseback might be a good option, especially if you are looking to free up capital and reduce exposure to residual value risk.
More than just a form of funding your companies vehicles. Now the most prominent form of fleet funding in recent years, and for many good reasons.
Contract Hire is a form of operating lease where a vehicle is supplied over a fixed period (normally 2 to 4 years) for a fixed monthly rental.
In essence Contract Hire provides a full operational solution to the acquisition, maintenance and disposal of company vehicles and can be linked to total online and/or outsourcing solutions to form a completely managed fleet facility.
The main benefits:
No large capital outlay, improving cash flow
VAT advantages over Purchase (for cars)
Off balance sheet funding
Fixed monthly costs, allowing improved budgeting and forward planning
Removes disposal risk
Removes risks associated with vehicle maintenance on full service contracts
Improves credit gearing
Provides access to Ogilvie Fleet’s purchasing power
One point of contact regarding fleet acquisition, administration and disposal
Removing the Hidden Charges:
If you have used Contract Hire in the past but have been 'hurt' by hidden costs, such as exaggerated early termination costs, penalty excess mileage charges or inflated end of contract condition costs, it's not that you have chosen the wrong product, just that you have chosen the wrong supplier.
Hilton Vehicle Leasing have what we believe is the most unique total contract offering in the UK leasing industry and ensure that such hidden penalty costs don't exist. We want clients to remain as such for many years and appreciate that trying to make a short term gain is the fastest way to lose you.
Taking the burden of maintaining your vehicle out of the equation
Our comprehensive car leasing vehicle maintenance package is a great option that many customers choose. It offers peace of mind, cost savings and can be easily added to your car lease deal for a fixed monthly fee.
Key Benefits of Our Maintenance Package Option
For a fixed monthly fee, our maintenance package takes the headache out of getting your new vehicle serviced and maintained. The package covers:
Manufacturers’ scheduled services
Approved, accredited garages and qualified technicians
Mechanical and electrical repairs and/or replacements including labour
All repairable and replacement parts required as a result of Fair Wear and Tear, including brake pads, discs, bulbs, batteries, exhausts, belts, wiper blades, alternators, starter motors, and (depending upon the cause) tyres*
MOTs (if required)
Easy one call / click booking and management process
Cost savings (the package is tailored to individual’s mileage and contract length)
Lower overall vehicle running costs
If you already benefit from a tailor made maintenance package, follow the link below to book a service, MOT or repair.