Understanding Business Car Leasing

Understanding Business Car Leasing
There are various ways of going about leasing cars for businesses. Each way has its own benefits and can satisfy the needs of a company. Contract hire is an arrangement in which there is absolutely no risk or problems associated with ownership.
Following are a few of the various features of Business Car Leasing:
• VAT is recoverable and it is an off balance sheet option.
• Two factors come into play if the company wants to attach a maintenance agreement, namely the anticipated mileage and the period for which the company might want to hire the vehicle for.
• With contract purchase, the company has the option of purchasing the vehicle after the car lease is terminated. It is suitable for those companies who are not eligible to claim VAT.
• There is also an on balance sheet car lease option, and suits the needs of those who may want to take on the risk of ownership, as the hirer will be responsible for the down payment.
Similar to a contract purchase, a lease purchase allows the company to buy the car after the end of the lease agreement. It is the company’s responsibility to pay off the balance at the end of the contract.

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