Print VersionContract Hire
A Contract Hire package from Masterlease is the easy way to manage your fleet. Here’s how it works. We provide a vehicle for a fixed period of time and for a set number of miles for a fixed rental - usually paid monthly. This covers everything - depreciation risk, breakdown cover, maintenance (optional), vehicle excise duty, administration and much more. All you have to do is insure it, fill it with fuel and get behind the wheel. Then at the end of the contract period the vehicle is collected - end of story. But that’s just the start of the benefits for your business.
Contract Hire from Masterlease provides your business with a whole host of financial advantages:
~ Fixed costs mean easy budgeting and smoother cash flow
~ Because we recover VAT on the vehicle purchase, you get lower monthly rentals
~ Our maintenance package offers your drivers access to a nationwide network of repairers, whilst fixed costs protect you against financial risk
~ No need for specialist knowledge of car procurement and disposal, we do this on your behalf
~ Reduced administration as we manage much of the day-to-day running of your fleet
~ Off balance sheet funding means vehicles appear as an expense - not an asset
~ You can reclaim 50% of the VAT on the finance rental*
~ You can reclaim 100% of the VAT on the maintenance rental*
~ You can claim corporation tax relief* (restricted relief on vehicles with CO2 emissions over 160 g/km)
*subject to your company circumstances
Advantages Of Contract Hire
~ The administrative burden of operating a company car fleet is borne by Masterlease. Without the hassle of attending to the details regarding your car fleet, valuable time is freed to concentrate on your own business.
~ Masterlease customers avoid the residual value and running cost risks. We will assume the depreciation / disposal risk and will be responsible for areas such as breakdown cover.
~ The cost to the customer is known in advance. With transparent costs for the life of the contract, budgeting is easy, and will in turn help to improve your company cash flow, whilst not exposing you to any interest rate risk. By foregoing the large capital commitment required to acquire and run a vehicle you can put those funds where they are needed most, into your core activities.
~ Customers will benefit from Masterlease’s expertise and buying strength. We have relationships with all manufacturers and buy over 20,000 vehicles a year. This gives us significant leverage when it comes to negotiating discounts with all UK vendors.
~ Your vehicles will be treated as operating leases per SSAP 21, and will therefore not appear on your company’s balance sheet, as they are owned by Masterlease. This may result in an improved gearing ratio.
As we acquire a vehicle for the purpose of hiring it out, we can claim back 100% of the VAT we are charged. We pass on this benefit to you in the form of lower rentals. You can recover 50% of the finance element of the rental and 100% of the maintenance element (assuming your business has the ability to recover VAT). As well as this you are entitled to tax relief on the rentals you pay.
If you currently purchase your vehicles outright but would be keen to explore Contract Hire instead, our Sale & Leaseback service could be of interest.
