Contract Hire is the businessman's simple solution for vehicle funding. This is in the form of a lease/hire, for cars or commercial vans and is available to Sole traders, Partnerships and Ltd Companies enabling them to acquire their vehicles without the financial risk of depreciation on what would normally be a large capital outlay. This form of hire therefore allows the release of tied up capital for more beneficial use within the company creating the optimum cash flow.

Our research at 1st4 has established that nearly 62% of all fleet registered vehicles are funded through vehicle leasing, which is increasing daily as more companies become aware of the financial benefits and advantages of this hire option.

In basic terms it is the cost of the calculated depreciation on a vehicle over a set period of time usually between 24 to 48 months and a prearranged mileage plus a fixed interest charge for the lease of that vehicle provided the business user does not exceed the parameters of the contract i.e. excess mileage or damage to the vehicle above what is classified as fair wear and tear.

Business's can choose optional extras such as maintenance, breakdown cover, GAP Insurance, Accident Management etc tailored to suit your specific needs and therefore reduce your administrative time for more important matters. This allows easy budgeting for forward business planning with fixed hire costs. The only added variables are the costs for fuel and insurance when a full package is undertaken.

1st4 leases and hire options include, contract hire, contract purchase, finance lease for businesses whilst providing personal contract hire and personal contract purchase for the private sector.

Since 1995 the new VAT laws make leasing a more attractive way for businesses to lease their vehicles because leasing companies can claim back all the VAT on a qualifying vehicle, therefore the finance element of the vehicle lease is calculated on the price of the vehicle less the VAT, not the show room price, saving your business money and by purchasing your vehicle using our discounted fleet terms we can save you even more money. Also if your business is VAT registered you can also claim back up to 50% of the VAT charged on the finance of the vehicle and up to 100% the VAT charged on the maintenance applicable when the vehicle is for business and private use. For vans/commercial vehicles used solely for business purposes the hirer may claim 100% of the VAT on both the finance and the maintenance.

As an alternative Company Directors may find they are financially better off by paying themselves a car allowance and opting for Personal Contract due to the benefit in kind CO2 tax laws.

At the conclusion of the agreement the vehicle is returned to the finance provider. However, if the business client requires a lease extension whilst awaiting the factory order of their next vehicle this can often be arranged easing the transition between vehicles with the minimum of fuss.

1st4 could minimise your business's vehicle administration to just choosing the vehicle and leaving you only with paying for fuel, oil and insurance

Contract Hire facts and key features:

• Minimum outlay (usually equivalent to three monthly rentals) improves cash flow
• Frees up a large amount of working capital for other business projects
  This removes the risk of depreciation or of any time consuming disposal problems
• Costs are fixed ensuring maximum control for accurate monthly and annual budgeting.
• Fixed interest rates = inflation proof rentals
• Vehicles do not show on balance sheet
  Monthly rentals can therefore be offset against taxable profits
  Tax efficient, with up to 100% corporation tax relief on rentals proportional to vehicle purchase (P11D) price.
• Because leasing companies can recover VAT on qualifying car purchases the reduction in capital outlay is passed on to the customer in lower monthly rentals.
• VAT is charged on monthly rentals
• VAT is reclaimable on monthly rentals
• Road tax is included for the duration of the lease
• Fixed maintenance charges optional
  (Maintenance = routine services plus consumables under fair wear and tear such as tyres, batteries, exhausts, windscreen wipers etc)
• Fixed charges for breakdown rescue cover optional
• Fixed charges for replacement vehicle in case of breakdown or accident optional
• GAP (Guaranteed Asset Protection) insurance optional (covers the short fall between the write off value at time loss)
• VAT chargeable on services (maintenance)
  100% of VAT recoverable on services (maintenance)
• Mileage on agreements can be rescheduled provided there is at least 6 months left before the agreement is due to terminate.
• Certain lease agreements can be extended
• Contracts can be on New and Nearly New VAT qualifying vehicles

At the end of an agreement, purchase may be possible via 3rd party?

Companies can take advantage of vehicle leasing to create a regular turnover of new or nearly new and prestige cars, which improves vehicle/mechanical reliability and portrays a professional image in the business market with the minimum capital outlay.

Upon your instruction and subject to credit approval Ist4 will acquire your vehicle on your behalf saving you valuable administration time. We will also arrange for free delivery to any UK address of your choice.