Partner Article

Workers Still Unaware of Benefits of Car Leasing

Although car leasing continues to grow; the vehicle leasing and rental sector supported a £24.9 billion gross value added contribution to UK GDP in 2013*, many workers are still unaware of the benefits of leasing a car.

According to Martin Wedge, MD of OVL Group Ltd and www.carcontracthire.com, whilst larger organisations are actively using car lease/ salary exchange schemes, HR departments and managers across smaller businesses could offer more in terms of car leases.

“We know that HR Managers are working hard to provide the best solutions for the business and their personnel with assorted car schemes, but I am not sure smaller businesses are benefitting equally because of a lack of awareness about business and personal car leases. Business and personal car leases provide individuals with a new car at an all-inclusive fixed monthly cost to suit budget, with little upfront payment required, regardless of the size of the business. Subject to passing the financing requirements, all you have to do is choose a new car, its colour and add fuel and go! Having either a business leasing scheme or more information about personal car leasing enables businesses of any size to offer staff greater choice and flexibility which enables greater staff loyalty.

“When it comes to business leasing, a business may for example need more than one vehicle and it is extremely hard on capital expenditure to buy 50 or even 5 vehicles at one time so leasing is a fantastic option. In addition, leasing is good for businesses as the rentals can be declared as tax-allowable expenses and VAT registered businesses can also reclaim some of the VAT. 100% of the VAT on the maintenance and 50% of the VAT on the finance element is reclaimable. Salary sacrifice schemes are an excellent way to help attract and retain staff, even by setting the car lease terms at two years to increase loyalty to the employer. There are also advantages to just providing information for personal leasing to employees perhaps who are having to commute by car.”

THE BENEFITS OF LEASING

• Low initial outlay typically equal to three or six monthly rentals.
• Rental costs are minimised due to discounted buying power.
• If a maintenance agreement is taken out this eliminates many risks and costs.
• Monthly costs are fixed, the only additionally costs are fuel and insurance.
• You don’t need to worry about the car losing value as it ages.
• You avoid the hassle of selling the car at the end of the contract.
• Leasing means you could be driving a new model every two or three years, which means you will never have to worry about the car being out of warranty.

*www.bvrla.co.uk/sites/default/files/documents/economic_impact_of_the_rental_and_leasing_sector.pdf

www.carcontracthire.com is powered by the OVL Group Limited.

TOP TIPS TO CONSIDER WHEN LEASING A CAR

By Martin Wedge, MD of CarContractHire.com

1. Keeping Things Simple

Car leasing is great for those who would like to drive a new vehicle for a set period of time at a fixed cost and may be a particularly attractive option if you can keep an eye on the mileage.

2. Annual Mileage

Most lease cars are typically set a mileage limit between 8000 and 40000 miles. A good leasing company should tailor your contract in a bespoke fashion to meet your needs.

3. VAT

Leasing is good for VAT registered businesses as 100% of the VAT on the maintenance, and 50% of the VAT on the finance element is reclaimable. All you need to do is retain car leasing proof for the HMRC for this benefit to be authorised.

4. GAP (Guaranteed Asset Protection) Insurance

GAP Insurance safeguards you during your car’s lease as a supplement to other insurance policies, for example if your vehicle is written off or stolen. It provides financial protection from certain types of loss that are not covered by standard car insurance and is designed to cover the difference between the what the insurance company will pay and the current outstanding balance on the lease.

5. Travelling Abroad

Check the terms and conditions if you’re planning on driving abroad, as permission in the form of a DVLA certificate V103 is required from the leasing company and there could be a small additional charge.

6. Tax Allowance

Don’t forget leasing is good for businesses as leasing payments can be declared as tax-allowable expenses.

www.carcontracthire.com

This was posted in Bdaily's Members' News section by Hazel Scott .