subject: Company Car Contract Hire - There Are Hidden Benefits To Consider! [print this page] Have you considered the real cost of owning a Vehicle compared to using Company Car Contract Hire?
Many years ago, the only purchase option of a new company vehicle was either some form of asset finance such as bank loan, Lease purchase or even a cash payment to the supplier. But as with the Car itself, the financial options for the company car buyer has become far more sophisticated.
There is also a need to consider the very real but sometimes hidden cost in providing a Car, which is of course an important asset in business productivity.
Operating lease and Long term rental are essentially the same as Contract Hire and the UK market is the largest in Europe for this product, with ALD being one of the key suppliers to the sector since 1958.
Company Car Contract Hire is a very cost effective and simple way to ensure that a Sole trader, Partnership or Limited Company can source and use a vehicle economically without fuss and bother, whilst leveraging the bulk purchasing power of a vehicle specialist. It also takes away the time required to find a car, negotiate a good purchase price, manage and maintain and the eventual dispose of the vehicle.
Very simply, under contract hire, the supplier will supply you the vehicle of your choice for a fixed period and agreed mileage for an easily pre-budgeted, fixed price. At the end of the period, provided the condition of the car is commensurate with its age and agreed mileage, the car is simply returned without further cost.
The agreement can optionally also include very cost effective servicing, as well as consumables such as brakes and tyres.
When comparing the true cost of running a car, regard must be made to all aspects of expense, not just the initial purchase price. In reality, Car Tax, Insurance, Servicing, Depreciation, Company Corporate Taxation / Allowances, Management Administration time and Vehicle Disposal are all hidden but very real considerations to take into account.
Company Car Contract hire will allow your staff to concentrate on your business and not non-productive vehicle issues and that is a really big potential time saver for business.
If you then take into account that contract hire can improve company cash flow, is effectively an alternate source of funding and because of bulk fleet buying power, can supply a better car for less money the whole deal becomes very compelling, even without the potential Corporate tax savings.
To summarise, there is far more cost to buying and running a company car than initial price. Contract hire can offer major benefits to you in three important principal areas: finance, administration and operational efficiency, thereby delivering a better return on investment, improvement of cash flow and a large reduction in management time and cost.
Best of all, it offers security in that they guarantee to keep you on the road, for ultimately less expense and at a fixed and Guaranteed cost that can be easily budgeted with no nasty surprises!
