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Vehicle Finance Lease

Lease finance
If you want to maximise the use of your vehicle without the responsibility of owning it, a vehicle finance lease will give you the freedom and flexibility you need.

A vehicle finance lease is a form of vehicle finance whereby the leasing company, the “lessor”, buys and owns the vehicle that customer, “the lessee”, requires. The lessee then hires the asset from the lessor and pays a rental over a pre-determined period for use of the vehicle.

The lessor will seek to recover the full cost of the vehicle, along with interest, over the primary agreement term. The lessee will have full use of the vehicle for its useful life, being responsible for its maintenance and insurance. The lessor claims the writing down allowances, whilst the lessee can claim both tax relief and VAT on the rentals paid.

At the end of the primary period the lessee can choose one of the following options:

  1. Enter into a secondary period where a nominal annual fee (peppercorn rental), usually equivalent to one month’s rental, becomes payable.
  2. Choose to sell the vehicle to an independent third party and receive the majority of the sale proceeds.
  3. Return to vehicle to the lessor.

What are the benefits of vehicle finance lease?

  • Low initial outlay – initial deposits can be as low as one monthly rental with the VAT spread over the term of the agreement.
  • Easy to budget – your financial commitment and monthly rentals are clearly defined from the outset.
  • Flexibility – you have the option to extend the agreement into a secondary period for a nominal annual fee (peppercorn rental).
  • Tax efficient – you pay VAT on the rental payments, not the purchase price. You can also normally offset your payments against your taxable profit.
  • Security – a finance lease is secured on the vehicle so no additional security is normally required from you or your business.

To find out how we can help with your finance lease requirements please call us today.

Contact us for a quote