Contract Hire is a finance method designed for maximum benefit for VAT-registered customers. It is designed to make motoring worry free, tax efficient and risk free.
We offer Contract Hire durations from 24 to 60 months on all vehicles. Total mileage allowance is 120,000 miles.
The finance supplier owns the vehicle during the contract period. The customer can own the vehicle as a third party after the contract terminates.
As the customer is the keeper of the vehicle, insurance is the customer's responsibility. Omega Vehicle Solutions can quote low-cost motor insurance for business users. Omega Ins Quote
The finance company, the finance company calculates a residual value at the time of quoting. If at the end of the contract the vehicle is worth less than originally expected, the financier is responsible for the loss. The second-hand car market is very unpredictable. Why should companies risk their profits by gambling with an unknown vehicle sale price when they come to sell in two, three or four years' time? The finance companies have dedicated used vehicle disposal functions that are experts at predicting and achieving the very best prices for their vehicles at the end of the contract.
If a non-maintenance contract is chosen, the customer is responsible for all routine servicing and maintenance costs. Assuming a maintenance option is taken, the customer need never worry about any unexpected servicing or maintenance costs upsetting cashflow (and profits!). A blown bulb, a blown tyre or a blown clutch is only a freephone call away from a speedy, no-cost repair. Peace of mind that allows the customer to get on with running their business, rather than worrying about the running of vehicles.
A Non-Maintenance Contract Hire agreement is where the customer is responsible for maintaining and servicing the vehicle as recommended by the vehicle manufacturer. The finance company does however supply the road fund licence for the full contract period.
A Full-Maintenance Contract Hire Agreement is where the maintenance contract supplier is responsible for maintaining and servicing the vehicle. This includes all costs due to fair wear and tear. Additional facilities may be added to a Full-Maintenance contract such as RAC cover and relief vehicle cover.
Off balance sheet. Contract Hire is the acquisition method that guarantees the vehicles will be off the balance sheet. This has the following advantages:
Typically a deposit of three monthly instalments is required. Up to nine months may be required for a business with less than two full years trading.
We arrange both delivery and collection anywhere in the mainland UK.
No! The customer doesn't own the vehicle at the end of the Contract-Hire. Is this a disadvantage? We don't think so! If you do own the vehicle at the end of the lease, it means that you do not have to go through the inconvenience of disposing of it. If a third party wishes to purchase your old vehicle this can also be arranged.
Yes. Cars emitting 160g/km CO2 or less are 100% fully allowable against and for cars emitting 161g/km or more 85% of the finance element of the lease cost is allowable against business expenses. This is regardless of the actual costs of the vehicle.
Vans are fully tax efficient. For cars and vans which are on a full maintenance lease, the maintenance element of the lease cost can be offset against tax.
Yes. Following the VAT changes of 1 August 1995 Contract Hire has become even more desirable and more popular. There were three major changes.
If you wish to end the contract early a termination charge is payable. This is usually 50% of the outstanding monthly rentals payable.
There are three options available at the end of the contract period.
Hopefully not! Charges are made only if the vehicle has done more miles than contracted to do. This is called an excess mileage charge; the excess mileage charge will be written on the contract and will vary from vehicle to vehicle. To avoid this charge we encourage customers to advise us during the contract if they feel that more or fewer miles than originally expected are likely to be done and we will amend the contract accordingly. The only other charge would be if the vehicle had been damaged and not repaired.
CO2 emissions and company car tax rules Since April 2002 company car tax has been based on a car's list price and official C02 emission figure. The percentage used to calculate the benefit is based on carbon dioxide (CO2) emissions measured in grams per kilometre (g/km).
Initially a minimum charge of 15% of the car's price was applied to cars emitting CO2 at or below a specific level, measured in (g/km). This charge rises in 1% increments for every 5g/km over the minimum level (there is an upper ceiling of 35%).
Diesel cars: there is a supplement of 3% up to the maximum charge of 35%. This supplement was waived for diesel cars first registered before the end of 2005 that met the EC emissions standard known as Euro IV. The Euro Standard is shown on the registration document for cars first registered after 1 March 2001 and is also included in information available in The Car Buyer's Guide.
The table below shows the relationship between CO2 emissions and percentage.
Company Car Tax BIK Rates 2019-23
The table above shows BIK tax bands (also known as company car tax) based on CO2 emissions of your vehicle.