This is an ideal funding method for VAT registered companies that wish to handle the administration of their vehicles, and have the asset shown on their balance sheet. This is a VAT beneficial finance option where the hirer can chose to pay the entire cost over an agreed lease period, plus an interest charge or pay lower monthly rentals during the lease period with a final payment based upon an anticipated resale value of the vehicle
Suitable For
- Organisations prepared to accept depreciation and operating cost risk
- Organisation with internal fleet management skills and systems
- All businesses with standard VAT & Corporation Tax situations
- Cars with a retail value of less than circa £25,000 and any light van
Main Features
- Optimised cash flow from fixed rental payments
- Rentals reduced through “balloon” final rental
- Client bears responsibility for disposal and bears resale value risk
- Client bears responsibility for control and cost of service and repair
Balance Sheet
- On-balance sheet funding
Vat Treatment
- VAT free funding reduces cost of rental
- 50% of VAT on funding element of rental normally reclaimable
- All VAT reclaimable on cars with no private use
- All VAT reclaimable on vans
Corporation Tax
- Writing down allowances spread over full period of contract & beyond
- 20% per annum on vehicles emitting less than 159 Co2
- 10% per annum on vehicles emitting more than 160 Co2
End Of Contract
Either:
- Client continues to lease the vehicle on a “peppercorn” rental
Then/Or:
- Client introduces 3rd party buyer for the vehicle to ecofleet / supplier
- ecofleet / suppliers sell the vehicle to the 3rd party at market value
- ecofleet / suppliers provide a rebate of rental to the client equal to the sale price
ecofleet Features
- Group buying power ensures consistently keen pricing
- “Balloon” rental set to match client’s mileage expectations
- Cars / vans delivered FOC
Is It Right For You?
There are scenarios where Finance lease is the right funding option to choose. We are able to analyse your fleet profile and will help you identify the best solution for your business. Backed by pro-active customer service for you and your drivers, ecofleet can design and deliver a comprehensive company car policy that is effective and matches your strategic financial objectives.
