There are many benefits to hiring your company fleet instead of purchasing the vehicles outright.
Fixed Monthly Costs
Contract hire is a fixed-cost form of motoring. For a set monthly payment, you get the use of a vehicle for an agreed duration and mileage limit that suits you. This fee takes into account the vehicle’s price when hired, forecasted mileage and estimated depreciation over the hire period. As long as you have not exceeded the mileage and the vehicle is in a fair condition, you just return it at the end of the contract, with no further cost.
Free Up Capital
Leasing a vehicle instead of purchasing it means you are not tying up capital. This means you can invest the money you are not paying upfront in growing your business and reducing debts.
Off balance sheet funding
Vehicle leases do not have to be shown on a balance sheet, which automatically improves a company’s liquidity ratio, gearing and return on assets.
Cash Flow
Little or no initial payment is required with contract hire, so it is a viable option for most businesses.
Future residuals
Payments take into account the vehicle’s future residual value, so the user doesn’t have to repay the entire capital cost.
Less administration
With Contract Hire, the administration and management burden can be transferred to a third party if taken with a maintenance plan.
Regular Change Cycle
By updating your cars at regular intervals of 2, 3 or 4 years, your corporate fleet can benefit from advancing technologies and ever-improving safety and fuel efficiency features.
