Member Article

Businesses leasing cars is on the up

With a growing 10% of vehicles on the UK’s roads now on lease, CarContractHire.com believes businesses are beginning to renew their interest in the benefits of leasing company cars, as well as offering car schemes that could be of interest to staff.

According to The British Vehicle Rental and Leasing Association (BVRLA) the vehicle leasing and rental sector makes a substantial economic contribution to the UK. In 2013, the sector supported a £24.9 billion gross value added contribution to UK GDP, which is the equivalent to the size of the economies of Edinburgh and Leicester combined.*

Martin Wedge, Managing Director of CarContractHire.com, explains why leasing is more widely becoming recognised as an attractive business option: “Businesses may for example need more than one vehicle and it is extremely hard on capital expenditure to buy 50 or even 5 vehicles at one time so leasing is a fantastic option. In addition, leasing is good for businesses as the rentals can be declared as tax-allowable expenses and VAT registered businesses can also reclaim some of the VAT. 100% of the VAT on the maintenance and 50% of the VAT on the finance element is reclaimable.

“In addition, car schemes seem to be on the up with employers mostly offering a leasing arrangement via a salary sacrifice which is an excellent way to help attract and retain staff, for example by setting the car lease terms at three years to increase loyalty to the employer.

THE BENEFITS OF LEASING

1. Low initial outlay typically equal to three or six monthly rentals.
2. Rental costs are minimised due to discounted buying power.
3. If a maintenance agreement is taken out this eliminates many risks and costs.
4. Monthly costs are fixed, the only additionally costs are fuel and insurance.
5. You don’t need to worry about the car losing value as it ages.
6. You avoid the hassle of selling the car at the end of the contract.
7. Leasing means you could be driving a new model every two or three years, which means you will never have to worry about the car being out of warranty.

*www.bvrla.co.uk/sites/default/files/documents/economic_impact_of_the_rental_and_leasing_sector.pdf

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TOP TIPS TO CONSIDER WHEN LEASING A CAR

By Martin Wedge, MD of CarContractHire.com

1. Keeping Things Simple - Car leasing is great for those who would like to drive a new vehicle for a set period of time at a fixed cost and may be a particularly attractive option if you can keep an eye on the mileage.
2. Annual Mileage - Most lease cars are typically set a mileage limit between 8000 and 40000 miles. A good leasing company should tailor your contract in a bespoke fashion to meet your needs.
3. GAP (Guaranteed Asset Protection) Insurance - GAP Insurance safeguards you during your car’s lease as a supplement to other insurance policies, for example if your vehicle is written off or stolen. It provides financial protection from certain types of loss that are not covered by standard car insurance and is designed to cover the difference between the what the insurance company will pay and the current outstanding balance on the lease.
4. Travelling Abroad - Check the terms and conditions if you’re planning on driving abroad, as permission in the form of a DVLA certificate V103 is required from the leasing company and there could be a small additional charge.
5. Tax Allowance - Don’t forget leasing is good for businesses as leasing payments can be declared as tax-allowable expenses.

www.carcontracthire.com

This was posted in Bdaily's Members' News section by CarContractHire.com .