Vehicle Leasing and Business Car Supply

Finance lease is similar to a contract hire lease in that the agreement lasts a set period of time and there are fixed monthly costs.

However, unlike a contract hire agreement, a finance lease allows you a number of different options at the end of the agreement.

You can choose to return the vehicle to the lease funder to be sold, sell the vehicle on behalf of the funder to a third party, or enter an agreed second lease paying a peppercorn rental.  

Finance leasing involves a proportion of the vehicle, including interest and costs, being charged back over a fixed period of time with monthly payments.

As part of a finance lease agreement you can choose to pay either the entire cost of the vehicle, including interest, over the monthly payments or you can opt for lower monthly payments with a final balloon payment that is based on the anticipated resale value.

During the agreement, the vehicle will remain the property of the lease funder however it will show as an asset on your balance sheet.

A VAT registered company can reclaim between 50% and 100% of the VAT paid on a finance lease, depending on whether it is a car or commercial vehicle, and your payments can normally also be offset against taxable profits.

Finance leasing is an option that is only open to businesses and we can help you decide whether it is the right choice for your fleet needs.

Wessex Fleet can also offer a fully bespoke funding package exclusively to our corporate customers.

We do this by looking at market and vehicle data sources so we are able to offer you the best price and terms on for Wessex funded vehicles on a lease contract tailored to your specific needs for that individual vehicle’s requirements.

This contract works very similarly to long term hire, with contract terms varying between 20 days and 48 months. In some cases, we can offer this with no termination fees if a vehicle needs to come back early.

We have created our own funding options so that we can help our customers grow their companies while limiting the long-term risk for them on finance products.

Another way to add a vehicle to your fleet is through a contract purchase.

A contract purchase is where you pay a deposit and then a fixed monthly cost for a set period of time-based on the vehicle’s value. When you reach the end of the contracted time you will have the option to purchase it for a pre-agreed balloon payment or to return the vehicle to the funder.

One of the main benefits of a contract purchase is that if you decide to buy the vehicle at the end of the contract then you already know the balloon payment amount, and so can budget accordingly for this.

The vehicle will be an asset to the business on your balance sheets and can be an efficient form of funding for VAT-restricted businesses needing commercial vehicles.

With contract purchase, you are still subject to excess mileage charges and return conditions if the vehicle is not kept by the business.