Choose Car Leasing And Beat The Credit Crunch

You can’t hide from it; it’s all over the news here in the UK... The Credit Crunch! House prices are falling but no one has the money to buy, all our house hold bills are rising but our wages are not matching the rise and to top it all off petrol prices have gone through the roof.

The final blow came earlier this month when EurotaxGlasses, the industry’s premier vehicle valuation specialists stated that they expected used vehicle values to drop by up to 12 % between now and the end of the year. Meanwhile 4x4 operators could experience depreciative hits on their vehicles of nearer the 20% mark.

With less money to lend, Banks and Finance companies are proving to be more difficult to borrow money from and when considering a major expenditure such as a new company vehicle - why would any business use valuable capital to buy a depreciating asset.

Contract hire, which provides off balance sheet funding, improves a company's gearing and can improve liquidity. In addition a VAT registered business can reclaim 50% of the VAT on the finance rental and 100% of the maintenance rental on a new car. In comparison no VAT is recoverable when a new car is purchased using cash, cheque or hire purchase.

The Benefits Of Contact Hire & Cheap Car Leasing:

1. Vehicles are supplied at a fixed monthly cost which will help with budgeting.
2. The agreement can include maintenance which reduces administration and helps with 'Duty Of Care' legislation.
3. Off Balance sheet funding improves gearing and opens up additional funding routes. This will help improve cash flow.
4. There are significant VAT and tax savings.
5. The company removes residual value risk in the future.
6. Advice on low Co2 vehicles helping with both the drivers Benefit In Kind and the company's Class 1 contributions.
7. Access to improved manufacturer discounts on purchase and maintenance.

While the 'Credit Crunch' brings many obstacles and challenges to your business, it also provides the opportunity for you to review your current business arrangements, helping you save money and reducing risk in the future.
As you can see simply by taking out a good cheap car leasing deal, you are saving yourself and your company money in the long run and actually getting one up on this credit crunch that’s hit the UK.

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