Finance Lease

Leasing involves buying the use of a vehicle and not the vehicle itself.  Unlike Contract Hire and Contract Purchase the risk always remains with the customer.

If the vehicles makes a profit or loss on disposal then the customer either suffers the loss or enjoys the benefit of the profit.  (e.g If the balloon payment on the agreement is £15,000 and the vehicle sells for £14,000 then the customer suffers a loss of £1,000.  The customer however retains 97.5% of The Sales of Proceeds.)  If the customer decides to keep the vehicle then he enters into a Secondary Period Rental which is payable annually in advance.  The Secondary Period Rental (SPR) is the same as the regular monthly payment.

*The Lessee pays a monthly rental for the use of a car which remains the property of the owner

*Rental charges are allowed in full against profits for cars costing up to £12,000.00 (half the excess rule)

*Leased vehicles have to capitalised on the balance sheet

*Legal ownership remains with leasing company but risk remains with customer on residual value

*Where a vehicle is used for business and private use, then only 50% of the VAT rental can be recovered

Find out about Funding Options