As one of the most cost-effective and easy ways of acquiring company cars and vans, contract hire is the most popular form of funding used by UK companies to fund their vehicle fleet.
In return for a monthly fee, businesses of all sizes can run their vehicles without the need to source or manage them and with no worries over vehicle depreciation or disposal.
Contract hire brings a wide range of operational and financial benefits to fleets of all types and sizes:
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Freeing up of capital
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Improved cash flow
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Fixed funding rates
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No risk of depreciation
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Removal of risk on residual values and servicing, repairs or maintenance costs
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Another credit line
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Rental costs can be offset against your taxable income
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VAT reclaim
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Off-balance sheet funding
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Reduced administration time and costs
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Improved cost efficiencies due to our economies of scale
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How it works
Classed as a type of operating lease, contract hire enables you to hire a vehicle for a set mileage and time period – typically between 24 and 60 months – at an agreed monthly rate. This rate covers all costs over the vehicle’s lifecycle from sourcing and delivery through to disposal. Servicing and maintenance can also be included for an optional fee.
The vehicle is still owned by ALD Automotive and is classed as being off-balance sheet, bringing improved gearing for your business and freeing up capital for investment elsewhere.
VAT-registered businesses can claim back 50% of the VAT on the finance rental where there is an element of private use or 100% if it is used exclusively on work purposes.
Rentals paid on vehicles with CO2 emissions up to 130g/km can also be fully deducted against corporation tax – this drops to 85% for vehicles with higher emissions.
At the end of the contract, we will simply collect the vehicle from you, and subject to the vehicle being returned in a condition appropriate for its age and mileage, no further costs are payable, thereby removing any cost and administration in the vehicle’s re-sale.
Total vehicle package
You can also benefit from optionally including servicing, maintenance and tyres into the agreement, helping to remove any issues with budgeting and cash flow while also removing the time and hassle involved.
In addition, 100% of the VAT on optional maintenance agreement can be reclaimed.
Working in partnership with our team of specialist consultants, you can also choose to bolt-on a wide range of other optional services to help create the perfect package. These range from roadside assistance to road risk management and licence checking, fuel management and daily and short-term rental.
Contract Hire: A cost effective solution
Your company can truly benefit from contract hire! Affording a wide range of newly released vehicles, choosing one that is suitable for your needs has never been easier. What’s more, upon returning the vehicle at the end of the deal, you can just sign up again for another agreement period and select among the most recently released models. You will be able to conveniently upgrade your fleet every two to five years; boosting the productivity and safety of all your employees, while also upholding a positive image for your company.
The expenses are much easier to handle since your vehicle’s monthly fees will be fixed and the optional servicing and maintenance add-ons can help to avoid any unwanted or unexpected costs.
ALD Automotive guarantees to meet all your business requirements; expertly assisting you throughout the deal and providing quality services that can surpass even the highest of expectations!
Funding options for business customers