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FUNDING OPTIONS


CONTRACT HIRE  Top of page
Contract Hire is the favoured option for companies who emphasise cost control. One regular and VAT- efficient payment will cover all motoring costs and risks, including the Road Fund Licence, depreciation and the eventual disposal of the vehicle. Many clients also choose to include a maintenance package that's designed to suit them.

The Positive Side is that Contract Hire means that clients:
  • Gain an additional credit line.
  • Can reclaim the VAT on 50% of their payments and on 100% of their maintenance package costs.
  • Run vehicles that are not recorded in the Balance Sheet but on the Notes to the Audited Accounts.
  • Can claim Hire Rental Tax Allowances.

Awareness Items, clients should be aware that Contract Hire:
  • Can incur a high cost if a contract is terminated early.
  • Yields no benefits if a car is returned in good condition but may incur charges if it is returned in poor condition.



PERSONAL CONTRACT HIRE  Top of page
Personal Contract Hire, as its name suggests, is essentially the same as Contract Hire but for private individuals. If you want fixed cost motoring, or have opted out of a company car scheme then Personal Contract Hire could provide you with hassle free motoring without the residual value risks associated with traditional ownership.

VAT is built into the monthly payments, but is not reclaimable by private individuals. Maintenance packages are usually available so that you don't get any nasty surprises.

There is only a Positive Side to Personal Contract Hire because it:
  • Allows you to hire new or used vehicles,
  • Includes a full-term Road Fund Licence
  • Can include a full maintenance package that takes all the worry out of motoring.



PERSONAL CONTRACT PURCHASE  Top of page
Personal Contract Purchase suits people who want to own the vehicle at the end of the contract and who value expense control. It is an excellent option for those who have opted out of a company car scheme or for non-VAT registered companies. This is a variation on lease purchase where the 'balloon' or deferred payment is agreed and guaranteed.

On the Positive Side, Personal Contract Purchase means:
  • A low deposit.
  • Fixed monthly payments that are reduced by the deferred balloon payment.
  • An option to own the vehicle at the end of the contract.
  • No disposal or unexpected balloon payment risks.
  • The option to refinance the balloon payment at the end of the contract.

Awareness Items, Personal Contract Purchase can mean,
  • A high cost if the contract is terminated early.
  • No benefit if the vehicle is returned in good condition but a possible charge if it needs refurbishment.
  • An excess mileage charge.



CONTRACT PURCHASE  Top of page
Ideal for companies who cannot fully reclaim VAT and is particularly suitable for financing the more expensive cars on the fleet, typically those costing more than £25,000.00

The big difference between Contract Purchase and Contract Hire is that there is the opportunity to buy the vehicle at the end of the contract period. You have the option of paying a balloon payment at the end of the contract which makes you the legal owner or alternatively you can return the vehicle to the funder.

Contract Purchase offers all the operational, managerial and administrative benefits of Contract Hire, together with the tax-efficient benefits of ownership, such as the ability to claim capital allowances.




FINANCE LEASE  Top of page
Finance Leasing is a fixed-term funding option for companies who want to administer their own vehicles and who want to show these as an asset on their balance sheet. Companies choose from 2 options:
  • 1. To pay for the entire cost of the vehicle and for the interest over the agreed lease period or
  • 2. To make lower monthly payments and incur a deferred or ballon payment at the end of the agreement.


Whichever is chosen, clients never take ownership of a Finance Leased vehicle. It must be sold to a third party and a portion of the sale's proceeds, together with any balloon payment must be paid to Thistle Vehicle Leasing.

The Positive Side is that, under the terms of a Finance Lease, companies will:
  • Gain a further credit line.
  • Combine a low initial outlay with low monthly costs.
  • Reclaim 50% of the VAT on their repayments and claim hire rental tax allowances.
  • Show another asset on their balance sheet.
  • Have equity in the sale proceeds of the vehicles.

Awareness Items, clients should understand that:
  • They are responsible for any loss incurred on the sale of the vehicle (Residual Value Risk)
  • They will never own the vehicle and cannot acquire it through a third party.




LEASE PURCHASE  Top of page
Lease Purchase tends to suit non-VAT registered companies who want to own their vehicle at the end of its lease. It's really a type of Hire Purchase that defers payment of the capital cost until the end of the contract when the deferred capital cost should equal the anticipated resale value of the vehicle.

On the Plus Side, Lease Purchase means:
  • Fixed monthly payments that are cheaper because they do not include the capital cost of the vehicle.
  • Eventual outright ownership when the final deferred payment is made.
  • 100% of any sale proceeds will go to the customer.

There's a Bigger Positive for Businesses who:
  • Gain an additional credit line.
  • Pay no VAT on their repayments.
  • Show their vehicle as an asset on the Balance Sheet.
  • Gain a Writing-Down Tax Allowance.
  • Can deduct interest charges as a business expense.

On the Other hand:
Lease Purchase can mean that, if the deferred payment has been set too high and proves to be more that the resale value of the vehicle, then clients must still make the full deferred payment.




HIRE PURCHASE  Top of page
Hire Purchase is the oldest vehicle financing method. Over an agreed period, clients repay the capital cost of their vehicle together with interest.

The Positive Side is that, with Hire Purchase, individual clients:
  • Don't need to make a large deposit and can keep their own savings intact.
  • Enjoy a fixed interest rate and fixed monthly repayments.
  • Will own the vehicle outright at the end of their contract.
  • Enjoy Consumer Credit Act Protection.

There's a Bigger Positive for businesses who:
  • Gain another credit line.
  • Will not pay VAT on repayments or Tax on interest charges. They'll also get writing down tax allowances.
  • Can put their working capital to good use.
  • Gain a Balance Sheet Asset.

The Other Hand:
  • Hire Purchase repayments are higher than those with other finance packages.
  • This method can limit your choice of vehicles.
  • You will be paying for a depreciating asset.


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All prices shown exclude VAT and are available to a certain category of business user, subject to status. Similar VAT inclusive funding packages are also available to private individuals. Ask for details.