FINANCE LEASE

This is a fixed monthly payment contract with a pre-determined final payment that you are responsible for to the finance company. At the end of the agreement the Vehicle must be sold to a third party who pay the Finance Company, they then deduct the pre-determined amount and give you any surplus less a small fee. However if the price you have sold the vehicle for does not cover the amount required by the finance company you are responsible for the shortfall.

FEATURES

ON BALANCE SHEET FUNDING

Vehicles are shown on balance sheet as assets.

VAT ON RENTALS RECOVERABLE*

50% of the VAT on rentals is recoverable if there is any private use of the vehicle.

RISK OF LOSS OR OPPORTUNITY TO GAIN

At the end of the agreement you must sell the vehicle to a third party, the full sale price is then forwarded to the finance company who return 95% {approx.} of any surplus amount. However, if there is a shortfall between the sale amount and the final payment then it will be invoiced to you as an additional rental.
* Subject to Article 7 (2)(A) of the VAT {Input Tax} Order 1992 {As Amended}