Compass purchase the vehicle of your choice after agreeing on the contract term, annual mileage, maintenance options and monthly rental.
On termination of the contract, you simply return the vehicle to us and assuming the contracted mileage has not been exceeded and all accidental damage has been satisfactorily repaired you have no further involvement.
Services included in Contract Hire:
- Free sourcing and delivery of your vehicles.
- Road Fund Licence for the duration of the contract.
- Free collection of your vehicle at the end of the contract.
Additional services which can be included:
- All routine servicing, mechanical repairs, batteries, exhausts and tyre replacement
- Replacement vehicle provided in the event of an accident or mechanical breakdown.
- Full membership of a motoring programme including Home Start, Road Side Assistance, Relay, Relay Plus and European Cover.
- Motor insurance, individual or fleet cover available.
- GAP insurance up to a maximum of £5,000.
Your only responsibilities:
- Choosing the vehicle.
- Choosing the service options.
- Paying for fuel, oil and insurance.
- Costs paid from income not capital.
- Fixed monthly rental for accurate budgeting and cash flow.
- Minimum initial expenditure, typically three months in advance.
- No capital tied up in a depreciating asset and no residual value risks on your vehicles (depreciation being the largest single cost).
- Routine servicing and maintenance costs can be covered.
- No purchasing or disposal hassles, providing constant mobility.
- The leasing company is able to reclaim all the VAT on the purchase price of the vehicle which is reflected in much lower monthly rentals to you, the customer.
- For new cars and VAT qualifying used cars, assuming some personal use, the current legislation allows you to reclaim 50% of the VAT on your monthly rental against your VAT liability. The other 50% can be offset against taxable profits.
- For non VAT qualifying cars and commercial vehicles current legislation allows you to reclaim 100% of the VAT, and offset 100% of the monthly rental against tax.
- Rentals allowable against tax.
- Costs ‘off balance sheet’ improving gearing ratios and return on assets.
As a fixed contract, it is designed to run for a specific period of time and can therefore carry some penalty if terminated early.