Car Finance Lease offers customers all the benefits of traditional leasing with the added flexibility to terminate the contract early if they so wish.
 

There are two different forms of finance lease:

1. Fully amortised contract where the total capital plus finance charges are repaid
2. Balloon lease where the partial costs (usually equal to the depreciation of the vehicle) are repaid over the fixed term.

At the commencement of the contract, usage parameters for the vehicle are agreed, and assuming this does not vary, monthly payments and interest rates are fixed for the duration of the contract. Therefore you benefit though fixed costs but do take on the administration and operating risks. At the conclusion of the contract you can continue to operate the vehicle under a "peppercorn agreement" although you will at no time take ownership of the asset.

How Is It Accounted For?
Although the ownership of the vehicle remains with Agnew Corporate for the duration of the contract, the car does appear on your balance sheet with the capital element of the outstanding rentals acting as the subsequent liability.

The rentals paid can be offset against taxable profits, although a proportion of the payments relating to the excess value of the vehicle over and above £12000 are disallowed.

Key Benefits

• Alternative source of credit
• Low initial outlay - normally 3 months rentals
• Assists cash flow within business
• Fixed monthly rental useful for budgeting & forecasting purposes
• Flexibility to build in final balloon rental
• VAT Payable on all rentals

For a full breakdown of Finance Lease, or for a quotation, please contact us here.