Personal Contract Hire – Personal Contract Purchase – Personal Lease Purchase

Personal Hire Purchase Flat Rate – Personal Hire Purchase Variable Rate

Personal Contract Hire:

For all new and nearly new cars – with a small initial rental payment and subsequent low monthly rentals

1. Initial Vat savings – the funder reclaims all the vat and rentals based on the net vat cost
2. Vat charged on rentals – vat cannot be reclaimed but is only charged on the rentals within the term of the contract
3. No depreciation concerns – vehicle never owned by the customer
4. No disposal problems – vehicle collected at the end of the contract
5. Flexible contract period – from 2 to 4 years
6. Full choice of vehicles – all makes available
7. Rental costed according to usage – based on predicted ‘miles per annum’ use
8. Maintenance option – contract can include maintenance if required
9. Available to all individuals –  subject to credit clearance - do not have to have a car allowance from employer

Personal Contract Purchase:

For all new cars – with a small initial rental payment and subsequent low monthly rentals – option to purchase at the end of the term

1. No vat savings – no one is able to reclaim vat included in the price of the car
2. 2.   No vat charged on rentals – as this is a ‘purchase’ option, no vat is payable on rentals
3. No depreciation concerns – vehicle can be returned at the end of the contract
4. Option to buy – vehicle can either be bought or returned
5. Flexible contract period – from 2 to 4 years
6. Full choice of cars – all makes available
7. Rental costed according to usage – based on predicted ‘miles per annum’ use
8. Maintenance option – contract can include maintenance if required
9. Available to all individuals –  subject to credit clearance - do not have to have a car allowance from employer

Personal Lease Purchase:

Suitable for all vehicles – a variation of Hire Purchase, that normally has a ‘residual value rental’ built into the agreement - small initial rental payment and subsequent low monthly rentals

1. No vat savings – no one is able to reclaim vat included in the price of the car
2. No vat charged on rentals – as this is a ‘purchase’ option, no vat is payable on rentals
3. Depreciation concerns – customer is responsible for disposal of vehicle
4. Flexible contract – from 2 to 5 years
5. Maintenance option – can be provided by a separate contract
6. Residual value rental – it is normal to have a ‘balloon’ or ‘residual value rental’ written into the contract to reduce the monthly rentals
7. No mileage restriction – rentals are not costed according to proposed usage

Personal Hire Purchase Flat Rate:

Suitable for all vehicles – ownership passes to the customer at the end of the contract – fixed interest rate - usually a larger deposit and higher monthly rentals than Personal Lease Purchase 

1. Interest calculation – interest charged on a ‘fixed rate’ basis and rentals fixed for the contract period
2. No vat savings – no one is able to reclaim vat included in the price of the car
3. No vat charged on rentals – as this is a ‘purchase’ option, no vat is payable on rentals
4. Depreciation concerns – customer is responsible for disposal of vehicle
5. Flexible contract – from 2 to 5 years
6. Maintenance option – can be provided by a separate contract
7. No mileage restriction – rentals are not costed according to proposed usage

 Personal Hire Purchase Variable Rate:

Suitable for higher value vehicles – ownership passes to the customer at the end of the contract – variable rate of interest - usually a larger deposit than Personal Lease Purchase – may have a ‘residual value rental’ at the end of the contract

1. Interest calculation – variable rate linked to either a Bank Base rate or LIBOR – interest paid on the reducing capital balance or spread evenly by way of a ‘Balanced Payment Plan’ method
2. Low early termination charges – usually only 30 days interest + outstanding capital
3. No vat savings – no one is able to reclaim vat included in the price of the car
4. No vat charged on rentals – as this is a ‘purchase’ option, no vat is payable on rentals
5. Depreciation concerns – customer is responsible for disposal of vehicle
6. Flexible contract – from 2 to 5 years
7. Maintenance option – can be provided by a separate contract
8. No mileage restriction – rentals are not costed according to proposed usage