A lease is essentially a long-term rental agreement, offering exclusive use of a car for a set period at a fixed monthly price.
You do not own the vehicle but are renting the vehicle as a “Lease Rental” from the elected Funder, who does own the vehicle.
As a business, this is the most cost efficient method of funding the vehicles as it takes advantage of the tax and vat regulations to reduce the whole life running cost of your vehicles and is supported by the buying power of the finance company, to assist in reducing the cost even further.
The greatest cost of running any new car is depreciation, and many new cars will lose more than half their initial value after the first three years of ownership.
Leasing a car lets you avoid any unexpected costs by offering a fixed monthly payment for the term of the lease.
Unlike dealership finance solutions called Personal Contract Purchase (PCP), or bank loans you only pay for the depreciation of the vehicle over the term rather than the full capital value.
Rather than pay large deposits you simply pay a small initial amount, usually equivalent to three monthly payments, at the start of the lease.
Then, at the end of the lease period (typically 2, 3 or 4 years), you simply hand the car back.
The job of selling the car and picking up the tab for depreciation is the responsibility of the lease company.
Personal Contract Hire (PCH) is also known as a Personal Lease. The product is identical to business agreements, but for personal individuals. Personal Contract Hire (PCH) is based on a fixed term contract, where the customer will agree the supply of a vehicle for a fixed term, and a pre-agreed monthly charge for the use of the vehicle.
Business Contract Hire (BCH) is also know as a Business Lease, Contract Hire or an Operating Lease. The agreement is based on a fixed term contract, where the business will agree the supply of a vehicle for a fixed term, and a pre-agreed monthly charge for the use of the vehicle.