Leasing a vehicle should make it easier to run your business, but it can be a challenge to know which option would be best for you. We explain some different leasing agreements and their benefits to help you decide.
Contract hire is a fixed-term leasing product which often includes maintenance. It enables businesses to access the vehicles they need without the upfront cost and financial risk of owning them.
This kind of finance agreement can facilitate management of your vehicle or fleet. To make budgeting straight-forward, charges are consolidated into one payment for the use of the vehicle, tax and other costs. You pay the fixed monthly fee and at the end of the agreed period, you return the asset to us, so you don’t need to worry about depreciation or disposal.
Another advantage is that contract hire vehicles can be kept ‘off balance sheet’ for most small and medium sized firms. This means Close Brothers will remain responsible for the asset, enabling you to keep your debt-to-equity ratios low.
We offer contract hire from 12 to 84 months and tailor agreements to meet your specific commercial requirements. Find out more.
An operating lease is a fixed-term leasing contract which does not include maintenance of the vehicle. It enables businesses to use the vans, lorries and other assets they need over a set period of time without purchasing them.
A key benefit of a non-maintained operating lease is that companies can control their own repairs and servicing. You pay a fixed monthly charge for running the vehicle, but you can budget for your own maintenance, and at the end of the operating term, you return it.
Like contract hire, operating leases allow most SMEs to keep these working assets off-balance sheet. By reporting your lease as an operating expense, you can release working capital and improve cash flow across your business.
We offer operating leases from 12 to 84 months, and you can either return the vehicle to us at the end of the primary term or choose to extend or upgrade the lease. Find out more.
A hire plan is a flexible leasing product which allows businesses to return their vehicles at any point during the agreed period without incurring a penalty. The high level of flexibility associated with this type of plan can enable strategic planning.
It works simply. At the start of the hire plan, a charge matrix which sets out costs for 12, 24 and 36 month periods is provided. All hire plan agreements start on the lowest, 36-month rate and will remain at that rate unless the vehicle is returned earlier. If the vehicle is used for a shorter duration, you will be charged pro-rata for the corresponding rate set out in the charge matrix.
For many SMEs, the transparency of hire plan agreements makes them an ideal option. We offer a competitive rate for all hire durations and businesses can use the charge matrix to budget for changing requirements.
Our hire plans are available for all light commercial goods (LCV) vehicles. Call us today to find out more.