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Finance

Personal Leasing

Personal leasing is a long-term agreement that allows you to use a car or van for a period of time at a fixed monthly price.

A number of different personal lease agreements are available through Advance Vehicle Leasing including Personal Contract Hire, Personal Contract Purchase and Personal Lease Purchase. All personal lease prices include VAT.

  • Personal Contract Hire PCH

    Personal Contract Hire (PCH) is based on a fixed term contract where customers pay a monthly rental for the use of a vehicle for a set period. It benefits customers wishing to eliminate the financial risk associated with disposal of a vehicle. Contracts are usually taken over two, three or four years. Some contracts can be formally extended beyond the end of contract date if required. PCH is very similar to business Contract Hire; both are based on a fixed annual mileage agreed on signing of the contract. You will need to work out how many miles you drive each year before a quote can be obtained. If you do exceed the agreed mileage at the end of your contract you will pay an excess mileage charge, which will have been agreed upon prior to signing your finance agreement. If you want fixed motoring costs consider adding maintenance to your contract. Maintenance generally covers servicing, routine maintenance, tyres, exhausts and batteries etc. It is important that the vehicle is returned in accordance with the guidelines set out in the ‘Fair Wear and Tear Guide’, a copy of which is made available to customers at the beginning of their PCH agreement.

    Advantages

    •  Flexible initial rental
    • Fixed term contract
    • Flexible term and mileage to suit you
    • You only pay for the use of the vehicle
    • At the end of your contract simply hand the vehicle back
    • Option of including maintenance with the contract
    • No depreciation or disposal risk

    Disadvantage

    •  You are tied in and this can make early termination can be expensive
    • There is a mileage restriction and if you go over this you can be charged an excess mileage fee
    • The vehicle must be looked after and maintained correctly, otherwise you can be charged for damage over and above that stated in the ‘Fair Wear and Tear Guide’
    • You must have fully comprehensive vehicle insurance
    • You will never own the vehicle as there is no option to buy it
  • Personal Contract Purchase PCP

    Personal Contract Purchase (PCP) is ideal for any individual that would like options at the end of their finance agreement. Personal Contract Purchase customers make an initial payment when they first take out the contract, they then pay a fixed monthly payment and then have an Optional Final Payment (OFP) at the end at the end of their contract which is often referred to as the GFV (Guaranteed Future Value).

    At the end of the contract you can trade in your vehicle with AVL and take another vehicle. If the trade in value is larger than the Optional final payment you will be able to use the equity towards the deposit on a new vehicle if you so wish.

    Or you can simply return the vehicle to the funder, as long as you are within the mileage on the contract and the vehicle is in an appropriate condition for its age there will be no charge.

    Alternatively you can pay the optional final payment outright or AVL can refinance it and you can keep the vehicle if preferred.

    Advantages

    • Low initial payment
    • Fixed monthly payments
    • No Early Termination penalty. If you wish to change the vehicle early, this can be done so by requesting a settlement figure and seeing where this sits in relation to the vehicle value. We will do this for you and help to sell the vehicle if required.
    • You can pay the Guaranteed Future Value at the end of the contract and own the vehicle, this can be refinanced if required.
    • No depreciation concerns if you wish to walk away at the end
    • The option of a maintenance package
    • The option of breakdown and recovery
    • The option of replacement vehicle cover in event of a major breakdown
    • Fixed Optional Final Payment when you first take the contract out. Any equity can be returned to you.
    • Cost effective

    Things to Consider

    • At the end of the contract you will have to decide whether you wish to sell the vehicle, return it or keep it
    • You must have fully comprehensive vehicle insurance

Business Leasing

Business leasing is a long-term agreement offering the exclusive use of a car or van for a period of time at a fixed monthly price. A number of business leasing options are available through Advance Vehicle Leasing, including; Contract Hire and Finance Lease. All Business leasing prices exlude VAT. Lease Purchase, Contract Purchase and Hire Purchase are also available. A business contract hire agreement offers many positive tax implications. Business customers can also take advantage of exclusive extras such as outsourced fleet administration. All business lease prices exclude VAT.

  • Business Contract Hire

    Contract Hire, often known as Operating Lease, is a long term rental agreement. Contracts can range from 12 to 60 months and AVL can tailor them to the businesses requirements. The Contract Hire/Leasing Company reclaims all of the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme). On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company.

    Advantages

    • Minimum capital expenditure
    • Accurate monthly budgeting
    • Improved cash flow
    • Rentals can be offset against business profits. Cars with a CO2 output above 130g/km are currently subject to a 15% disallowance on the amount of the rental that can be claimed against the businesses taxation, for contract-hired cars with a CO2 output of 130g/km or below, there is currently no disallowance
    • No end of contract disposal problems
    • Minimal administration
    • AVL will provide On-going advice and support
    • Road Fund Licence (Vehicle Excise Duty) provided for the duration of the contract
    • The option of a maintenance package
    • The option of breakdown and recovery
    • The option of replacement vehicle cover in event of a major breakdown

    Things to Consider

    • You are tied in and this can make early termination can be expensive
    • There is a mileage restriction and if you go over this you can be liable for charges.
    • The vehicle must be looked after and maintained correctly, otherwise you can be charged for damage over and above that stated in the ‘Fair Wear and Tear Guide’
    • You must have fully comprehensive vehicle insurance
    • You will never own the vehicle as there is no option to buy.
  • Business Finance Lease

    Finance Lease is a method of financing a vehicle that is favoured by businesses that want control of the sale at the end of contract. The business obtains use of the vehicle by paying a rental each month. The monthly rental is determined by the initial cost of the vehicle (excluding VAT), the period of the Finance Lease and the residual value (sometimes called the balloon payment). Although you never take ownership, at the end of the Finance Lease contract a Final Rental (balloon) is payable. Usually this means that the vehicle is sold and a proportion of the proceeds of the sale are returned to the lessee.

    Most Finance Lease companies will offer a number of payment options to suit your cash flow. You can lower the monthly rental with a Final Rental (balloon) at the end of the contract, or you can pay the entire cost in monthly rentals (normally referred to as a fully amortised Finance Lease), in which case you may be able to extend the Finance Lease with a secondary period rental (sometimes called a peppercorn rental).

    Advantages

    •  Minimum capital expenditure
    • Accurate monthly budgeting
    • No damage recharges
    • No Excess Mileage charges.
    • If you wish to change the vehicle early, this can be done so by requesting a settlement figure and seeing where this sits in relation to the vehicle value. We will do this for you and help to sell the vehicle if required.
    • Finance lease is a popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use). On contracts with maintenance the VAT on the service element is 100% recoverable
    • Rentals can be offset against business profits. Cars with a CO2 output above 130g/km are currently subject to a 15% disallowance on the amount of the rental that can be claimed against the businesses taxation, for cars with a CO2 output of 130g/km or below, there is currently no disallowance
    • The option of a maintenance package
    • The option of breakdown and recovery
    • The option of replacement vehicle cover in event of a major breakdown

    Things to Consider

    • You will never own the vehicle as you must sell it to a third party at the end of the agreement
    • Operating risk associated with running the vehicle
    • You must have fully comprehensive vehicle insurance
  • Business Contract Purchase

    Contract Purchase (CP) is ideal for any business that would like options at the end of their finance agreement. Contract Purchase customers make an initial payment when they first take out the contract, they then pay a fixed monthly payment and then have an Optional Final Payment (OFP) at the end at the end of their contract which is often referred to as the GFV (Guaranteed Future Value).

    At the end of the contract you can trade in your vehicle with AVL and take another vehicle. If the trade in value is larger than the Optional final payment you will be able to use the equity towards the deposit on a new vehicle if you so wish.

    Or you can simply return the vehicle to the funder, as long as you are within the mileage on the contract and the vehicle is in an appropriate condition for its age there will be no charge.

    Alternatively you can pay the optional final payment outright or AVL can refinance it and you can keep the vehicle if preferred.

    Advantages

    •  Low initial payment
    • Fixed monthly payments
    • If you wish to change the vehicle early, this can be done so by requesting a settlement figure and seeing where this sits in relation to the vehicle value. We will do this for you and help to sell the vehicle if required.
    • You can pay the Guaranteed Future Value at the end of the contract and own the vehicle, this can be refinanced if required.
    • No depreciation concerns if you wish to walk away at the end
    • The option of a maintenance package
    • The option of breakdown and recovery
    • The option of replacement vehicle cover in event of a major breakdown
    • Fixed Optional Final Payment when you first take the contract out. Any equity can be returned to you.
    • Cost effective

    Things to Consider

    • At the end of the contract you will have to decide whether you wish to sell the vehicle, return it or keep it
    • You must have fully comprehensive vehicle insurance

Hire Purchase & Lease Purchase Options

Lease Purchase is effectively hire purchase with a balloon payment at the end. You pay a fixed monthly payment but you must pay the final payment and buy the vehicle at the end of the contract.

Hire Purchase is the traditional way of funding vehicles. You pay a fixed monthly payment, then you own the vehicle outright at the end of the contract.

We can do Outright Purchase, Hire Purchase as Lease Purchase for personal individuals as well.

Or, we even offer Outright Purchase

Cash rich businesses or individuals may wish to buy their vehicle outright. We can still do this. Due to our buying power we can offer our discounts on outright purchase to our customers and save you money.

Lease Purchase/Hire Purchase

Lease/Hire Purchase is for people who would like to own a vehicle by paying ‘x’ amount a month over a period of time. It is a flexible funding option and it is possible to put down a larger initial payment, which in turn reduces your monthly payments.

Lease Purchase is effectively hire purchase with a final balloon payment. Hire Purchase is funding ‘x’ amount over a period of time and at the end of the contract you own the vehicle.

The main difference between Lease Purchase and Contract Purchase is that instead of having the choice at the end of the contract to purchase the vehicle, which you would have with Contract Purchase, you have already entered into a contract to purchase the vehicle at the end of the contract with Lease Purchase.

Agreements can be between 12 and 60 months but the agreement can be settled at any time. Some funders allow you to pay a lump amount mid contract to lower the monthly payments or shorten the term accordingly.

Advantages

  • Low initial payment
  • Effective budgeting with balloon facility, ownership of the vehicle is acquired once the balloon has been paid
  • Monthly payments are not subject to VAT
  • The vehicle is a company asset for balance sheet purposes
  • Lease Purchase frees up your capital for other business uses

Things to Consider

  • The Final Payment (balloon) must be paid for at the end of the contract
  • The vehicle is yours once you have paid the final balloon payment
  • You must have fully comprehensive vehicle insurance
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