You're a Business and would like a vehicle for a fixed monthly budget with no risk of ownership.
Contract Hire (CH) offers the benefits of a potentially low deposit, usually three monthly rentals in advance, followed by a totally fixed monthly rental that includes annual Road Fund Licence and can even include all scheduled maintenance.
This is ideal for businesses who can tell right from the start what the total costs for that vehicle will be for the life of the agreement.
The risk of ownership lies with the contract hire company. Once the rental period has expired, the vehicle is returned to the Contract hire company with nothing more to pay providing the vehicle has not exceeded the pre-agreed mileage and has fair wear and tear.
Contact Woodstone Funding before the end of the rental period and we will be happy to quote you for your next vehicle.
Business benefits: Contract Hire may be regarded as 'off balance sheet'. Your accountant can advise you on how this may affect your business accounts and how it could improve your gearing ratio.
As an Operating Lease, rentals can be offset against taxable profit.
For VAT registered companies, up to 50 % of the VAT on the finance element of the rental can be reclaimed, where the car is used for both business and personal use by the driver. Where the vehicle is used exclusively for business purposes or is a commercial vehicle, all of the VAT element of the rental may be reclaimed.
If you take Contract Hire with Maintenance included, you may be able to reclaim all of the VAT on the maintenance element of the rental, even if the vehicle is used for some private use by the driver.
Consult your accountant for further advice on tax and VAT implications of this product and how they may apply to your business.
You're a Private Individual and would like a vehicle for a fixed low monthly budget, but you don't want the worry of what its worth when you finish paying
Personal Contract Hire (PCH) is almost identical to Contract Hire for businesses but is specifically for private individuals. The Tax and VAT benefits do not apply to private individuals. It still offers the benefits of a potentially low deposit, usually three monthly rentals in advance, followed by a totally fixed monthly rental that includes annual Road Fund Licence and can even include all scheduled maintenance.
This is great for people who want to be able to tell right from the start what that car is going to cost them each month. If you include the maintenance charges into your monthly rental as well, you will know from day one what you'll be paying for the life of the agreement. No unexpected service bills and even the annual Road Fund Licence is included in your monthly rental!
The risk of ownership lies with the contract hire company. Once the rental period has expired, the vehicle is returned to the finance company with nothing more to pay providing the vehicle has not exceeded the pre-agreed mileage and has fair wear and tear. Contact Woodstone Funding before the end of the rental period and we will be happy to quote you for your next vehicle.
PCH is only available to private individuals. No tax relief or benefits apply.
You're a Business or Ltd Company and want a flexible, tax efficient agreement, which still allows you to receive benefit from the sale proceeds of the vehicle
Finance Lease (FL) is a flexible product with a profile similar to Hire Purchase (HP) or Lease Purchase (LP). The difference between Contract Hire and this type of lease is that when the vehicle is sold on, you can receive the majority of the sale proceeds; typically over 95%.
Finance Lease is available in two formats, residual value and fully amortised. A residual value lease offers lower monthly rentals than typical loan repayments for an equivalent capital amount, as the monthly rental rate is based upon the diminishing value of the asset, with a final balloon payment covering the anticipated residual value.
Under a fully amortised lease, the monthly repayments reflect the full value of the vehicle over the primary lease period. At the end of the term, the lessee may elect to lease the vehicle for a secondary period at a nominal rental.
At the end of the lease period you must sell the vehicle yourselves. This means that you could sell it on to a family member or an employee who may have taken a fancy to it, and still get the benefit of the majority of the sale proceeds. Should you wish to own it yourselves, it would first need to be sold on to a third party and then bought back by yourselves. Woodstone Funding could assist you with this option.
Finance Lease is only available to businesses and is only effective if they are Vat Registered.
Business benefits: Finance Lease can be treated in much the same way as Contract Hire and rentals can be offset against taxable profit.
For VAT registered companies, up to 50 % of the VAT on the finance element of the rental can be reclaimed, where the car is used for both business and personal use by the driver. Where the vehicle is used exclusively for business purposes or is a commercial vehicle, all of the VAT element of the rental may be reclaimed.
If you take Finance Lease with a Maintenance package included, you may be able to reclaim all of the VAT on the maintenance element of the rental, even if the vehicle is used for some private use by the driver. (Maintenance is not always available on all Lease Hire products)
Consult your accountant for further advice on tax and VAT implications of this product and how they may apply to your business.
Woodstone Funding offers all of these finance products but not all are available for every type of vehicle, asset or customer.
To find out which product is best for you, please contact us