Fleet funding - Page 4

An increasing number of private and public sector fleets are turning to car clubs as a flexible alternative to pool car schemes.

Whether the company outright purchase their fleet vehicles or have a leasing agreement, there will be a replacement cycle in effect to indicate when the vehicles will need to be replaced.

A social housing organisation is the latest company in the UK to adopt the new salary sacrifice scheme from Pendragon Contracts.

Daily rental is a short term leasing option for fleets, and can offer fleets a rental package without the long time financial commitment that comes with contract hire.

Finance lease is a method of financing a vehicle over a set period and the lessor - the finance company - retains ownership of the vehicle.

Salary sacrifice schemes allow employees to give up a portion of their income before tax in return for a company car. These cars can be funded by the company through a number of methods, but contract hire is the most common.

A move to make business funding a key issue to be tackled by the new coalition government has been welcomed by leasing, rental and contract hire companies.

Businesses targeted in effort to reveal car club benefits

Many companies have taken the decision to offer staff cash in lieu of a company car. However, this does not absolve the company of its health and safety and duty of car responsibilities.

With depreciation being a key consideration we show you how to understand and interpret residual values forecasts.

There are a myriad of funding options for fleets to consider, but whichever direction a business takes to fund its fleet it should be reviewed on an annual basis.

Outright purchase - or buying vehicles - remains a popular choice amongst smaller companies, but there are associated risks.

For a flexible option, daily hire or rental arrangements can be appropriate, especially where vehicles are only required on a short term or irregular basis.

Hire purchase is a simple method of buying a vehicle on deferred payment terms, where you have the option to become the owner of the vehicle at the end of the agreement.

Contract purchase for a business aims to replicate the contract hire product, but uses a purchase based product.

A mini lease offers the same flexibility as rental, but over a slightly longer term, allowing a business to get the cars and vans it needs without long contracts.

Many employers offer a ‘cash-for-car’ option to employees who would qualify for a company car.

Sale and leaseback, also called ‘purchase and leaseback’ or simply ‘leaseback’, is where a business sells its vehicles to a lessor and continues to use them under the terms of a lease.

Lease purchase is structured in the same way as contract purchase, with a lump sum or so-called balloon payment made at the end of the agreement based on the residual value.

The Government is using tax as a means of encouraging the use of ‘cleaner cars’ by aligning tax bands with a vehicle’s CO2 emissions.

Businesses will be affected by new accountancy rules for leasing if proposals in a discussion paper by the International Accountancy Standards Board (IASB) are adopted.

Sale and leaseback, also called ‘purchase and leaseback’ or simply ‘leaseback’, is where a business sells its vehicles to a lessor and continues to use them under the terms of a lease.

Here are some key issues fleets need to consider when choosing a rental supplier.

However a fleet is funded there is the risk of incurring ‘hidden’ or ‘unforeseen’ costs and its imperative to include them when budgeting.

Brokers are a very effective and quick method of accessing vehicle leasing products, especially PCP or contract hire.