Personal contract hire is the same as business contract hire but aimed at private users and is commonly referred to as a personal car lease.

Personal Contract Hire

The car is purchased by the finance company who estimates a value of the car at end of the term and your monthly payment then consists of the depreciation and interest. The benefits are no residual value risk and fixed payments, but the car has to be returned in a reasonable condition and not at a greater mileage than stated at contract inception or the finance company will levy an excess mileage charge for this. The road fund licence (RFL) is included for the entire contract period.

Summary: Personal Contract Hire provides fixed monthly payments with no disposal risks or hassle. An optional fixed price car maintenance plan can be added for total peace of mind.

Personal Contract Purchase (PCP)

Personal Contract Purchase or PCP has terms normally from 24 months up to 60 months, again with fixed repayments and a guaranteed future value (GFV) which you have the option to pay to own the car at the end of the agreement although you can also choose to hand the car back to the finance company with nothing further to pay. The car needs to stay within the mileage amount stated at contract inception and also returned in a reasonable condition or the finance company does have the right to levy a charge for the loss in value.

Summary: A finance product for those who wish the option to own their cars but avoid the risk of financial loss upon disposal.

Hire and Lease Purchase

A tried and tested method of achieving vehicle ownership is hire or lease purchase. Usually hire purchase (HP) is subject to an initial deposit followed by monthly payments until the full amount of the loan including interest is repaid, the final payment usually has an option fee added and when this is paid the title of the vehicle passes. For the record, conditional sale is a similar product although title passes automatically upon the agreements inception.

Lease purchase operates in a similar way and has a residual or balloon payment at the end of the agreement. The benefit in looking at lease purchase over hire purchase is that the same value of vehicle can be purchased over the same period at a lower monthly cost as a proportion of the outstanding amount is incorporated into the fixed residual or balloon payment. Both options offer on balance sheet funding with access to writing down allowances for tax and accounting purposes, the purchaser is treated as the owner of the vehicle when the agreement is signed and not when the purchase option is exercised. All interest payments are deductible from profits as a trading expense. No VAT is applicable to these finance plans.

Summary: Ideal funding method for individuals who wish to take ownership and the responsibility for the resale and disposal.

Balanced Payment Plan

This finance option allows a double benefit where the client requires a fixed payment linked to a variable interest rate facility. The client can benefit from future interest rate reductions and lower interest penalties upon early settlement of the agreement. The finance house base rate (FHBR) will fluctuate during the agreement and in the event that the FHBR is higher than that reflected in the periodic payments, then your payments will continue until the capital and interest balance is repaid. Alternatively should the FHBR be lower than originally assumed, then fewer payments will be required to complete the agreement. Capital lump sums can also be paid to create a shorter repayment period. In some cases the original monthly rental can be reduced whilst leaving the payment period as per the original agreement.

Summary: Ideal for clients who traditionally settle their agreements early and who take the responsibility of the disposal of their vehicles.

Short Term Leasing

Has your car let you down, or do you need one in a hurry until your new car arrives? Short term car leasing or flexilease is the most convenient and flexible way to bridge the gap for any car rental over 28 days.

With low deposits, flexible terms, no long term commitments and low monthly payments, our short term, flexible car leasing service is ideal for employees on temporary contracts, new recruits, start up businesses, as part of a larger fleet or for those who just fancy a new vehicle every few months!

Summary: Ideal for individuals and companies that do not require a long term vehicle commitment.

None Status and Subprime Leasing

Since banks started lending money to consumers there have always been people who did not meet the normal underwriting criteria for the main stream banks. These people as far as vehicles go, fell into the none status or subprime leasing bracket. However due to the credit crunch, it started to have an effect on lending criteria and since mid 2008 more and more people were finding themselves classed as a high risk by the banks and leasing companies.

The main stream banks realised that they could no longer lend the amounts that they had been doing as they were taking excessive risks. So underwriting criteria was completely changed and all of a sudden millions of people and businesses found themselves in the non status bracket through no fault of their own.

Summary: Ideal for individuals with a poor credit history or existing adverse credit.