Business Vehicle Finance

Introduction

Brittle Motor Group offers a full range of finance products for all businesses. There is a full choice of finance options available to you:

  • Hire Purchase
  • Lease Purchase
  • Personal Contract Purchase
  • Finance Leasing
  • Contract Hire

This section gives a brief description of each product and its benefits for your business. We design our products to meet the needs of today’s businesses and there are several benefits common to all.

Key benefits

  • Easy to arrange
  • Simple documentation
  • Full range of products
  • Creditor insurance available
  • Backing of a national financial institution

Finance Options

Hire Purchase

Hire purchase is where you pay an initial deposit, followed by equal monthly instalments over a set period. The payments are fixed for the full length of the agreement and cannot vary. At the end of the agreement, once you have paid all the instalments and the purchase fee, you will own the vehicle. The interest rate is fixed over the whole agreement.

Key benefits of Hire Purchase

  • Reduced capital outlay
  • Fixed monthly payments
  • Finance charges are exempt from VAT
  • Finance charges are allowable against tax
  • The vehicle can be treated as a balance sheet asset
  • Writing down allowances can be claimed

Lease Purchase

Lease purchase is a type of hire purchase with lower monthly payments and a larger final payment, based on the expected future value of the vehicle. You pay a low initial deposit followed by monthly payments over 2, 3 or 4 years and then the large final payment. The interest rate is fixed so your payments won’t vary. At the end of the agreement, provided all the payments have been made including the purchase fee, you will own the vehicle. There is no VAT due on the finance charges so lease purchase is particularly suitable for non-VAT registered businesses.

Key benefits of Lease Purchase

  • Intial capital outlay reduced
  • Lower fixed monthly payments
  • Finance charges are exempt from VAT
  • Finance charges are allowable against tax
  • The vehicle can be treated as a balance sheet asset
  • Writing down allowances can be claimed

Finance Leasing

This is a rental product offering low monthly rentals and a large final rental. You pay a small number of rentals in advance, followed by equal monthly rentals over the agreed period. At the end of the agreement you arrange to sell the vehicle and the final rental is settled from the proceeds. You are liable for any shortfall but you will benefit from any excess over the agreed final value. You can opt for a full pay out lease where there is no final rental. At the end of the agreement you can either arrange to sell the vehicle and benefit from the proceeds or you can enter a secondary hire agreement for a nominal rental.

Key benefits of Finance Leasing

  • Lower monthly rentals
  • Rentals are allowable against tax (restricted on cars costing more than £12,000)
  • 50% of the VAT can be reclaimed on rentals of cars if used privately. If use exclusively for business 100% of the VAT can be reclaimed
  • Cash flow is improved
  • Monthly rentals are fixed
  • The vehicle can be treated as a balance sheet asset

Contract Hire

This is a rental produce where the monthly rentals are based on the period of hire, the annual mileage, the vehicle price and the anticipated future value of the vehicle. Service and maintenance cover can be included. You usually pay an initial payment of three monthly rentals and this is followed by equal monthly rentals over the 2 or 3 year period. At the end of the agreement, as long as you have fulfilled the mileage and condition requirements, you simply return the vehicle to us.

Key benefits of Contract Hire

  • Lower monthly rentals
  • Rentals are allowable against tax (restricted on cars costing more than £12,000)
  • 50% of the VAT can be reclaimed on rentals of cars if used privately. If use exclusively for business 100% of the VAT can be reclaimed
  • There’s an optional maintenance package to cover unexpected costs
  • Cash flow is improved
  • Monthly rentals are fixed
  • Administration is minimal
  • You’re protected against any fall in used vehicle prices
  • You’re not responsible for disposing of the vehicle
  • Your vehicle can be changed for a new one every 2 or 3 years

Benefits Product by Product


Hire
Purchase
Lease
Purchase
Personal
Contract
Purchase
Finance
Leasing
Contract
Hire

Reduced Capital Outlay

Fixed Payments

Simple Budgeting

Extra Credit Line

Cashflow Benefits

Off Balance Sheet Funding

No Vehicle Disposal Problems
optional

No Depreciation Risk
optional

Fixed Maintenance Costs
optional

Emergency Service Cover
optional

Relief Vehicle
optional

 

Tax Benefits Product by Product


Hire
Purchase
Lease
Purchase
Personal
Contract
Purchase
Finance
Leasing
Contract
Hire

Finance Charges Allowable Against Tax

Writing Down Allowances Claimable*

Rentals Allowable Against Tax*
see note (i)

VAT on Purchase Reclaimable for 100% Business Use

Finance Charges not Subject to VAT

Rentals VAT Reclaimable
see note (ii)
50%
50%

Maintenance VAT Reclaimable
100%

*Subject to £12,000 expensive car rules

Note (i): The portion of rentals that can be claimed is reduced for cars costing more than £12,000

Note (ii): 100% of the VAT on rentals can be reclaimed on cars used exclusively for business and on commercial vehicles. If any private use of car occurs (e.g. taking it home at night), 50% of the VAT is reclaimable although this could be lowered depending on the individual VAT recovery position of the business

Protecting your Payments

Our Payment Protection Plan covers your repayments if you can’t work due to unexpected circumstances. There are two levels of cover for businesses covering different situations including, accident, sickness, involuntary unemployment, critical illness and death.

Further Information
This is just an outline of the finance products available from Brittle Motor Group. Please ask for details of how we can help you.