Your Questions
Types of Finance

Finance Methods

Here are a the main finance options available to you personally as a private user and for business usage as well.

(Click on "Q" links from 1 to 8 for more details behind each finance method)

Q01: Business Vehicle, Contract Hire


Q02: Personal Contract Hire


Q03: Business Contract Purchase for New Vehicles


Q04: Personal Contract Purchase for new cars 


Q05: Business Finance Lease


Q06: Hire Purchase for Cars 


Q07: Sale & Lease Back


Q08: Outright Purchase


A01: Business Vehicle, Contract Hire


If your business normally buy cars or vans with cash, a bank loan, through a traditional Hire Purchase scheme, you may find Contract Hire a far more cost-effective option. Under current VAT legislation, all of
D G East's lenders are able to reclaim the VAT on their business's New or 'VAT qualifying' used vehicle (less than 3 months old).


This saving is then passed on to your business in the form of lower monthly rentals, fixed throughout the agreement. Not only does Contract Hire allow your business to run a new vehicle for an inclusive monthly rental but it also releases valuable capital back into your business. This means your business could afford an even better vehicle than you initially thought.


Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network, at a dealer of your choice. Maintenance packages (Subject to terms and conditions of the agreement) include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.


At the end of the agreement the vehicle is collected thereby avoiding time-consuming disposal and any worries over depreciation of the vehicle (Excess mileage and vehicle damage charges other than fair wear and tear may be payable). Annual Road Fund Licence is included in the monthly rental for the duration of the contract.


For VAT registered businesses, VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges.


Key Benefits of Business Contract Hire:

(Subject to terms and conditions of the agreement)


  • Low initial outlay
  • Flexible terms from 24 to 60 months
  • Road fund licence included in the monthly rental
  • Choice of rental period
  • No depreciation risks
  • Ability to show the vehicle off your balance sheet
  • Proportion of the rentals allowable against tax
  • Optional monthly maintenance packages
  • Optional Gap Insurance protection
  • Lowest fixed monthly rentals
  • No time consuming disposal issues
  • More capital available for your business
  • VAT reclaimable on the rentals
  • Complete peace of mind

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A02: Personal Contract Hire


Personal Contract Hire allows you to drive the vehicle of your choice without ever owning it. You simply hire your new car for a period of time, between 12 and 60 months.


At the start of the agreement a low initial deposit is required, usually 3 monthly payments in advance. Then the amount you pay each month is fixed for the length of the rental period, which means that you also benefit from easy budgeting.


Monthly rentals are minimised in two ways. D G East and our partner companies are able to reclaim VAT paid on the purchase price of the car, and the saving is passed on to you in the form of reduced monthly rentals. In addition the estimated value of the car at the end of the rental period is taken into account, so the stronger the residual value of your new car the lower your monthly payment will be.


At the end of the agreement the vehicle is collected thereby avoiding time-consuming disposal issues and any worries over depreciation of the car (Subject to terms and conditions of the agreement).


Routine servicing and maintenance costs may be included for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network, at a dealer of your choice. Maintenance (Subject to terms and conditions of the agreement) packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.


Personal Contract Hire offers a simple and cost-effective solution to driving the vehicle of your choice.


Key Benefits of Personal Contract Hire or PCH:

(Subject to terms and conditions of the agreement)


  • You choose deposit
  • Low initial outlay from just 1 month's payment
  • Flexible terms from 24 to 60 months
  • Fixed rentals
  • Choice of rental period
  • Lowest possible fixed monthly rental
  • No depreciation or disposal issues
  • No final payments
  • Road fund licence included
  • Optional monthly maintenance packages
  • Optional Gap Insurance protection
  • Complete peace of mind

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A03: Fixed Business Contract Purchase for New Vehicles


Business Contract Purchase is a highly flexible and affordable way of driving your new vehicle.


Pay an initial deposit, followed by a series of fixed monthly payments over an agreed period between 12 and 60 months. Your payments may be significantly lower than anticipated because the predicted value of your new vehicle at the end of the agreed period is taken into consideration. For this reason your company may find that you can choose from a wider range of cars than originally thought.


Business Contract Purchase can ease cash flow and free up valuable capital that can be used more effectively elsewhere within the business. This option provides your business with a number of benefits. The car appears as an asset in the accounts and a proportion of its value can be written down against profits. Interest payments are allowable against tax, and taking up the maintenance option will save you administration time and avoid unexpected bills.


Business Contract Purchase gives you flexibility at the end of your agreed contract period. Your company has the option to own the vehicle but with the security of a guaranteed future value should the vehicle be worth less than the anticipated value.


This means you have 3 options at the end of your agreement:


Option 1

Make the payment and keep the vehicle.


Option 2

Extend the agreement by spreading the final payment over a further period.


Option 3

Return the vehicle without making the final payment (Excess mileage and vehicle damage charges other than fair wear and tear may be payable.) This releases you from further obligation except for excess mileage and vehicle damage charges should the estimated mileage agreement be exceeded or any damage be considered greater than fair wear and tear.


Key Benefits of Business Contract Purchase:

(Subject to terms and conditions of the agreement)


  • Releases tied up capital
  • Low initial outlay from just 1 month’s payment
  • Flexible terms from 24 to 48 months
  • Fixed rentals
  • Choice of rental period
  • No depreciation risks
  • Option to purchase the vehicle at the end of the agreement
  • Ability to show the vehicle on your balance sheet
  • Can be written down against profits
  • Optional Gap Insurance protection
  • Complete peace of mind 

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A04: Personal Contract Purchase for new cars 


Choose to save money or have better vehicle. Personal Contract Purchase is a highly flexible and affordable way of driving your new vehicle.


You pay an initial deposit, followed by a series of fixed monthly payments over an agreed period between 12 and 60 months. Your payments may be significantly lower than anticipated because the predicted value of your new vehicle at the end of the agreed period is taken into consideration. For this reason you may find that you can choose from a wider range of cars than you originally thought.


Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network, at a dealer of your choice. Maintenance packages (Subject to terms and conditions of the agreement) include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.


Personal Contract Purchase gives you flexibility at the end of your agreed contract period. You have the option to own the vehicle but with the security of a guaranteed future value should the vehicle be worth less than the anticipated value.


You have 3 options at the end of your agreement:


Option 1

Make the payment and keep the vehicle.


Option 2

Extend the agreement by spreading the final payment over a further period.


Option 3

Return the vehicle without making the final payment (Excess mileage and vehicle damage charges other than fair wear and tear may be payable). This releases you from further obligation, except for excess mileage and vehicle damage charges should the estimated mileage agreement be exceeded, or any damage be considered greater than fair wear and tear.


Key Benefits of Personal Contract Purchase or PCP:

(Subject to terms and conditions of the agreement)


  • Low initial outlay from just 1 month’s payment
  • Flexible terms from 24 to 48 months
  • Fixed rentals
  • Choice of rental period
  • No depreciation risks
  • Option to purchase the vehicle at the end of the agreement
  • Optional monthly maintenance packages
  • Optional Gap Insurance protection
  • Complete peace of mind

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A05:  Business Finance Lease


Business Finance Lease is a straightforward rental agreement that offers significant tax advantages, particularly if your business is VAT registered. Business Finance Lease is designed to make budgeting easier for your business.


With a 'Balloon' style Finance Lease you can reduce your monthly rentals even further because the car's estimated resale value is taken into account when the rental payments are calculated. The estimated value is then offset to the end of the agreement, thereby reducing your rental payments. At the end of your lease agreement, you must sell the car to an unconnected third party.


With a Finance Lease your sales proceeds will first need to cover your outstanding 'balloon' payment and any balance will then be refunded to you. Any shortfall remaining from the 'balloon', however, will be your responsibility to settle.


Like Business Contract Hire for VAT registered businesses, VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges. Even so this is just like having a vat rate of 8.75%!!


Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network, at a dealer of your choice. Maintenance (Subject to terms and conditions of the agreement) packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.


It is important to stress that whilst you may benefit from the sale of your vehicle you could also be required to cover the potential shortfall. Finance Lease does not offer complete peace of mind and customers looking for no vehicle disposal issues would be better suited to Business Contract Hire.


Key Benefits of Business Finance Lease:

(Subject to terms and conditions of the agreement)


  • Low initial outlay from just 1 month's payment
  • Flexible terms from 12 to 60 months
  • Choice of rental period
  • Ability to show the vehicle off your balance sheet
  • More capital available for your business
  • Improved cash flow
  • You could benefit from the sale of the vehicle to a third party
  • VAT reclaimable on the rentals
  • Optional monthly maintenance packages

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A06:  Hire Purchase for Cars


D G East supplies the vehicle and you pay a monthly amount for an agreed period and ultimately you own the vehicle. The details of the agreement can be tailored to your needs and budget, based on initial payments and /or final balloon payment.


Key Benefits Hire Purchase:

(Subject to terms and conditions of the agreement)


  • Lower initial outlay than outright cash purchase
  • The vehicle appears as an asset on your balance sheet
  • You can claim capital allowances
  • A choice of fixed or variable interest rates Interest on repayments can usually be offset against taxable profits

Disadvantages: monthly repayments are normally higher than with contract purchase and you cannot reclaim VAT on the vehicle's purchase price. You are responsible for all the risks of owning, administering, running, maintaining and disposal of the vehicle.

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A07: Sale & Lease Back


Owning your fleet used to be a viable option for cash-rich companies but the recent steady fall in secondhand car values is leaving fleet owners exposed to unexpected losses. As a result, increasing numbers of companies are turning to contract hire instead. Sale & Leaseback allows companies to switch the entire fleet immediately to contract hire without changing a single vehicle or alternatively have the entire fleet replaced.


Key Benefits of Sale and Leaseback:

(Subject to terms and conditions of the agreement)


  • Release capital tied up in the fleet, which can be redirected to your core business
  • Offers VAT savings by removing your fleet from the balance sheet
  • Peace of mind!
  • Eliminates the risk of depreciation and hassle of disposal
  • Makes budgeting easier since you pay a fixed monthly amount under your contract hire agreement
  • Gives you the option of including maintenance costs, relief vehicles and roadside assistance in the fixed monthly payment
  • Improves your company's borrowing potential
  • Allows an immediate change to contract hire without any operational implications for your vehicles or drivers
  • All the normal benefits of Contract Hire (see above)
  • Sale & Leaseback usually makes far more financial and administrative sense than a gradual changeover to contract hire. 

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A08:  Outright Purchase


  • We can offer discounts to outright or cash buyers.
  • We can take cars in Part Exchange vehicles and also buy unwanted vehicles


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Finance Options Definitions

For private customers


Hire Purchase

A conventional method of buying a car over a period of months, which would be a benefit to customers who want to totally pay for the goods in a cost effective manner and enjoy the flexibility of being able to settle early.


Lease Purchase

A more sophisticated method of funding which works on a similar principle to Hire Purchase. A funding agreement where the company acquires ownership when all the payments including the option to purchase have been made. Part of the capital cost of the vehicle may be deferred into a ”balloon“ payment at the end of the agreement, which equates to the anticipated market value of the vehicle. Lease Purchase agreements can also be settled early.


Personal Contract Purchase - PCP

A fixed payment structure similar to Lease Purchase but with an agreed annual mileage with the added benefit of having an ‘Optional Final Payment’ at the end of the agreement. Often referred to as a ‘Minimum Guaranteed Future Value’ which protects the hirer from negative equity at contract end. Contract Purchase enables regular payment to cover funding, road fund licence and depreciation to an agreed age and mileage. An optional maintenance package can be included.


Personal Contract Hire - PCH

Choose to save money or have a better vehicle. Also known as an Operating Lease, Personal Contract Hire allows an individual to pay for the usage of a car rather than pay for the ownership. At the end of the contract the car is simply handed back. All rentals include VAT. An optional maintenance package can be included so that the monthly payment covers everything except fuel and insurance with no unexpected repair bills. The vehicle is hired and not purchased.


Finance Options Definitions

For business customers


Hire Purchase

A conventional method of buying a car or van over a period of months, which would be a benefit to customers who want to totally pay for the goods in a cost effective manner and enjoy the flexibility of being able to settle early.


Lease Purchase

A more sophisticated method of funding which works on a similar principle to Hire Purchase. A funding agreement where the company acquires ownership when all the payments including the option to purchase have been made. Part of the capital cost of the vehicle may be deferred into a ”balloon“ payment at the end of the agreement, which equates to the anticipated market value of the vehicle. Lease Purchase agreements can also be settled early


Contract Purchase

A payment structure similar to Lease Purchase but with an agreed annual mileage with the added benefit of having an ‘Optional Final Payment’ at the end of the agreement, often referred to as a ‘Minimum Guaranteed Future Value’ which protects the hirer from negative equity at contract end. Contract Purchase enables regular payment to cover funding, road fund licence and depreciation to an agreed age and mileage. An optional maintenance package can be included.


Finance Lease

Typically structured in the same way as Lease Purchase with or without a balloon payment at the end. Fixed monthly rentals. Initial rental can be small improving cash flow. The customer is responsible for any maintenance costs along with the risk of resale value and disposal. The vehicle is hired and not purchased. VAT is payable on all rentals and partially recoverable (50% on Passenger Cars and 100% on Commercial Vehicles- VAT registered businesses only).


Contract Hire

Also known as an Operating Lease, Contract Hire allows a company to pay for the usage of a car rather than pay for the ownership. At the end of the contract the car will simply be handed back. Contract Hire allows the use of Company vehicles from a fixed monthly rental over a set period giving inflation proof and fixed costs. Optional maintenance package can be included so that the monthly payment covers everything except fuel and insurance with no unexpected repair bills. The vehicle is hired and not purchased. VAT is payable on all rentals and partially recoverable (50% on Passenger Cars and 100% on Commercial Vehicles- VAT registered businesses only).




D G East Partnership

Corbins  Angley Rd, Cranbrook, Kent TN17 2PL

01580 715550