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Prestige Car Leasing is a phrase Morgan Highfield & Land invented many years ago to explain how it was possible to Lease a premium brand car from an alluring range of Mercedes-Benz, Porsche, BMW, Jaguar, Audi, Land Rover & Range Rover models.
Contract Hire is one of the most popular ways to lease a new prestige car, perfect for both Business & Personal customers who want an alternative to ownership & traditional car finance. With a range of initial payments, fixed monthly rentals & flexible terms, Contract Hire has many advantages, but best of all, with Business & Personal contracts there's no need to worry about vehicle residual values when the Leasing agreement ends - simply hand back the keys & return the car.
We make Prestige Car Leasing easy & with a Contract Hire solution you'll be able to lease a premium brand car for much less than you probably thought possible.
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Business Contract Hire is a great way to lease because the business will be hiring rather than ever owning the vehicle. So, a business enjoys the benefits of driving a new car, for an agreed period just without all the downsides associated with a traditional business bank loan or cash purchase.
A formal process, typically over an extended period ranging from two to a maximum of five years, Business Contract Hire involves a credit agreement between an actively trading business & a financial lender. The business will never be liable for future re-sale values & all risk associated with vehicle ‘disposal’ at the end of the lease becomes the sole responsibility of a lender.
Q: How Business Contract Hire works?
A: In return for longer-lasting commitment, competitive repayment terms are offered to the business, ones that are significantly more attractive than a short-term ‘renting by-the-day’ solution could ever provide. There’s also an added advantage with Contract Hire, a business can choose from a much wider range of cars, often to an exact specification & colour.
To calculate the total balance payable, Business Contract Hire is easily understood when split into two-parts. An Initial Payment (known as the ‘Initial Rental’) is engineered for comparison from a multiple of the monthly rental, this is made at the start of the contract. Equal recurring payments (‘Monthly Rentals’) then follow over a fixed period. The total balance repaid is the Initial Rental plus the combined number of monthly rentals all added together, it’s that simple.
If preferred, increasing the Initial Payment reduces (usually on a pro-rata basis) the annual expenditure a business needs to make. Although there aren’t overall savings to be had “paying more upfront” has become popular with sole traders, partnerships & smaller Limited Companies looking to keep monthly motoring outgoings to a minimum.
Once the business agrees on an annual mileage, this will be multiplied by the number of years an agreement is to be based upon & forms the ‘total contracted mileage’ for the life of that contract. Greater than average mileages are fairly reflected, increased pricing that considers ‘real world’ influence of a higher mileage on vehicle future values is applied. This way, all types of business user can benefit from a tailored quotation, matching their business needs without ever paying ‘over the odds’.
When the agreement comes to an end, the business hands over the keys & returns the car. Assuming the vehicle is returned within the boundaries of reasonable wear & tear, & within the terms of the contract a business agreed to with a lender, there’s nothing else to pay so this is how Business Contract Hire works.
Q: Why go for Business Contract Hire?
A: Business Contract Hire could best be described as a ‘hedge’ to protect a business against the unforeseen, particularly as vehicle re-sale values are extremely changeable. Economic downturns & consumer attitudes to vehicle brand, fuel type or efficiency are particularly damaging to residual values, perhaps critically just at the wrong time when a business wouldn’t wish to be burdened by larger amounts of depreciation or additional motoring costs. So, because you’ll never own the vehicle with Business Contract Hire future re-sale values & possible car deprecation are no longer a concern to the Business leasing the car.
The purchase price of the vehicle & predicated future values (decided by a lender) are the two most important factors that dictate the whole life costs of a Business Contract Hire agreement. In simple terms, the price you pay is calculated from the vehicles estimated depreciation over a fixed period & this explains why we see such variability of pricing for different models, from differing manufacturers but all with a comparable ‘List Value’.
Motoring budgets can be set several years ahead as the financial burden of the agreement is know from the start, many business’s say this is one of the most important reasons they always choose Business Contract Hire. The costs of Road tax are also included for the duration of the contract making administration of a vehicle so much easier.
It’s handy to offer employees a choice of car from wide a range of models best suited to their position, circumstances or an agreed budget & one that can be benchmarked to an unbiased view for the different distances members commute to & from work. Projected annual mileages can be fine-tuned to suit the needs of each individual driver, with peace of mind coverage for those that exceed the pre-agreed amount in the form of a reasonable pence per mile charge for excess.
Not having to invest large amounts of business working capital into a car can be beneficial, especially if these reserves can be reinvested or redeployed effectively into another area of the business. We have a wide range of options on Initial Payment starting with just 3 times the monthly rental, but also options at 6, 9 or even 12 rentals in advance.
In most cases for an additional monthly cost, Business Contract Hire agreements provide the option to include a maintenance package. Maintenance packages offer comprehensive cover including routine servicing, replacement brake pads, replacement tyres (excluding damage sustained from theft, malicious or 3rd party damage), batteries, exhausts and in fact all other parts that are subject to fair wear and tear. All scheduled maintenance work can be carried out by the main retailer network, usually at a retailer of choice. For cars out of warranty, there’s the added value of cover for mechanical fault & breakdown in addition to routine consumables when you choose to include maintenance. Often maintenance packages can also save a business time, certainly those without fleet manager. Employees can also take advantage of mobile tyre fitting, express servicing facilities & a direct billing system whereby there’s no need for a re-charge or use of company account.
Q: Making an informed decision about Business Contract Hire?
A: *Key Benefits;
*Key Areas for consideration;
* Subject to terms and conditions of the agreement
VAT registered businesses, a proportion of VAT is currently reclaimable on the rentals @ 50% of the VAT on the capital element (assuming an element of private use) and @ 100% of the VAT for any maintenance charges.
Find out more about Company Car Tax & Leasing
Important Message – Morgan Highfield & Land are not an IFA & do not offer qualified tax advice. Any general information found at prestige-car-leasing.co.uk or otherwise is no substitute for your own qualified tax or legal advice.
Personal Contract Hire, or ‘PCH’ for short, is the lower cost, zero risk way to privately lease a new car. As higher value prestige cars are more likely to possess those notoriously unpredictable future residual values, Personal Contract Hire is exceptionally suited to individuals who want to drive a superior model from a prestigious manufacturer, culminating in a perfect ‘Prestige Car Leasing’ solution.
It’s true, premium brand cars depreciate & more recently sometimes at eye-watering rates, but the idea we could make a desirable prestige car more affordable to a personal customer, without them ever having to take on ownership or pay a sizable lump sum as an upfront payment, really took off when Personal Contract Hire first launched in 2001.
Q: What is Personal Contract Hire?
A: Personal Contract Hire is credit agreement between you the consumer & a lender. This arrangement is one whereby you’ll drive but never own the vehicle & therefore best explained as the long-term ‘lease’ of your chosen new car for an agreed period. In return for your extended commitment there’s more time for the lender to manage the car’s projected depreciation & because you’ve become part of a buying collective, typically you’ll benefit from generous reductions translating into a very competitive monthly rental.
Monthly rentals for Personal Contract Hire are calculated from a combination of the purchase price & estimated future resale value. The bit in the middle, the vehicle’s projected depreciation, is the part you’ll be paying for, this the main reason you’ll find such variability of pricing & different Personal Contract Hire offers at varying times of year.
Sometimes it’s a good idea to keep an open mind on your final choice of prestige car lease, this way you might actually find a lower Personal Contract Hire rental on a more expensive model than you’d originally considered, that’s if you are prepared to be a little flexible on matters like colour, engine type or even how quickly you might be able to take delivery. When prestigious manufacturers are looking to ‘cut a deal’, the recommend retail price only tells part of the story, so this is often a great opportunity to bag yourself a Personal Contract Hire special offer.
Estimated resale values are never your problem with Personal Contract Hire, they are exclusively a responsibility & risk of the lender but one thing’s fair enough, the more miles you cover the lower a lender’s likely resale value will be, hence your monthly rental will more expensive & so best to estimate your total contracted mileage carefully.
In summary, Personal Contract Hire agreements are straight forward & easy to understand. There are flexible options on initial payment, followed by further monthly repayments over an agreed period. At the end of the deal your car will be collected but you need to make sure things like the spare keys, driver manuals & equipment you could have removed, like head restraints, are all enclosed within the car on the day of collection. If you’ve exceeded the total contracted mileage there will be additional, but reasonable, charges to pay. The same can be said if the general status of your car falls outside of the conditions deemed as fair wear & tear, but if you’ve cared for the car as if it were your own, like most individuals do, then there’s usually nothing else to pay.
Q: Why choose Personal Contract Hire?
A: If you think about it, nearly every private owner of a new or nearly new car is in effect leasing their own vehicle, even if they didn’t take out a Personal Contract Hire agreement, but some folk just haven’t looked at it this way (& they probably should). On occasion, even today we still hear comments like “But I’ll have nothing to show at the end of the lease?” So, let’s take a moment to better understand why Personal Contract Hire is ‘the’ way to drive a new prestige car & ownership is really a thing of the past.
Remember the moment when you purchased your last car, it was a nice feeling, the smell of the new interior or the unblemished coat of paint all added to the experience. Perhaps using your own cash or some sort of loan, possibly even a hire purchase with a cash deposit or the balance from a part exchange? You paid the asking price or maybe you haggled for deal, perhaps you settled on an older model or a nearly new car where that big saving off the list price seemed good idea at the time?
Either way, you drove the car for several years, paid for each year’s road tax as & when, but had no idea how much your new car would have been worth in the future, you might even have found this unsettling? Maybe the used car market boomed & you swerved that ‘down turn’, but at some stage the new car effect wore off or you just fancied a change, whatever the reason, you decided to sell the car back to a retailer or perhaps some other way, to realise the highest amount. Either way, did you get the price you wanted & did you enjoy the experience? Probably not! Did you receive less than you thought you should or had hoped for? Maybe?
One thing is for sure, the sale price you settled on for your old car was a lot less than you paid. When you add back in the interest charges on a traditional loan, or the better deployment of your savings if invested elsewhere onto the whole balance, plus the actual depreciation you’ve experienced, the picture starts to become a lot clearer & why Personal Contract Hire is such a good idea.
The fact that you’ve been leasing all along, just using your own money to fund things, taking on all the resale risk, certainly for most people doesn’t add up & Personal Contract Hire has transformed the car buying attitudes of thousands of private individuals over the years who in the future will always lease & never own.
Put simply, owning your own vehicle is typically more expensive & certainly more time-consuming so leasing with a Personal Contract Hire is more convenient, more affordable, and you’ll enjoy all the benefits of a new prestige car & most certainly without any of the risks involved with vehicle ownership.
Q: Is Personal Contract Hire right for you?
A: *The advantages of Personal Contract Hire
*Key Areas for consideration, is Personal Contract Hire right for you?
* Subject to terms and conditions of a credit agreement with lender.
Important Message – We are not an IFA & do not offer qualified tax advice. Any general information found at prestige-car-leasing.co.uk or otherwise is no substitute for your own qualified tax or legal advice.
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Morgan Highfield & Land and Prestige Car Leasing are trading names of Yorkshire Vehicle Finance Limited who are a credit broker, not a Lender.
Yorkshire Vehicle Finance Limited is Authorised and Regulated by the Financial Conduct Authority - FRN 665369.
Yorkshire Vehicle Finance Limited is not an IFA & does not offer qualified tax advice. Any general information found at prestige-car-leasing.co.uk or otherwise is no substitute for your own qualified tax or legal advice. Lenders may pay us for introducing you to them.
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Business Contract Hire pricing displayed in RED is shown exclusive of Vat @ 20%, with 12 payments in advance and per month.
Personal Contract Hire pricing displayed in BLACK is shown inclusive of Vat @ 20%, with 12 payments in advance and per month.
Contract Hire and all other methods of funding are subject to status, guarantees may be required. Different terms, mileages & contracts are available upon request.
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