Lease HireLease Hire has many of the benefits of Contract Hire without the perceived inflexibility.
In addition, you may wish to offset a proportion of the vehicle cost as a final payment. This is usually referred to as a balloon payment calculated at the outset of your agreement as a percentage of the vehicle price. This could reduce your monthly rentals and have a positive effect on your cashflow. Your balance sheet is likely to show the value of any vehicle on a Renault Lease Hire agreement as a fixed asset and any outstanding rentals as a liability. With low deposits, flexible repayment periods and fixed rental amounts you could control and improve your cashflow.
How it WorksAt the end of your contract, you have three options :
1. You can return the vehicle and well forward your share of the balance of proceeds to you once anything owed to us, including any sell-on expenses, have been settled.
2. Acting as our agent, you can sell the vehicle on our behalf and receive a share of the sale proceeds, assuming no balance is owed to us.
3. If you want to continue to use the vehicles you can pay a nominal fee (usually one months rental) and carry on driving for the whole of the following year. There are no mileage restrictions simply drive as much as you want to.
Benefits of Lease Hire
- Has the benefit of ownership without being the real owner
- Can offset the whole rental amount against taxable income
- Have no mileage restriction
- Monthly rentals are fixed but there's flexibility through variable deposit options.
Tax relief and VATYou may be able to claim tax relief on Lease Hire rentals.
After deducting a realistic residual value, the depreciation is charged as a revenue expense against the profit and loss account. Interest is an allowable expense that can also be charged as a revenue expense and spread over the term of the agreement. As the Manufacturer Finance House can recover the VAT on the purchase of all leased vehicles, your rental is calculated using the on-the-road (OTR) price exclusive of VAT. You could claim up to 50% of the VAT payable on the rental on cars where there is both private and business use and up to100% on commercial vehicles and cars where there is no private use. Please note, all references to taxation and VAT are subject to confirmation by your professional advisor.