When deciding how to fund and manage your fleet, many smaller to medium sized businesses are turning to leasing rather than purchasing the vehicles themselves, here are some of the reasons why:

Vehicle leasing can be a cheaper and easier alternative that doesn’t burden your business with rapidly depreciating assets.

It releases capital, improves cash flow and provides you with more confidence when forecasting vehicle expenditure.

With the optional maintenance package it releases you from the time-consuming burden of maintenance, repairs, tyres, accident management and vehicle disposal, allowing you to concentrate on your core business.

As a dynamic forward think company we seek out the best fleet funding and fleet management options, we benefit from strong relationships with have established with our suppliers, enabling us to pass savings directly to you, our customers.

Fleet funding is the leasing or purchase agreement that you put in place to finance your company vehicle arrangements. There are several funding options available:

  • Business Contract Hire
  • Sale & Leaseback
  • Personal Contract Hire
  • Finance Lease

Each funding option is designed to cater for different, specific fleet needs.

Although a simple concept in principle, Fleet funding can be a minefield if you’re not properly prepared. With so many companies, deals and advice out there in the market, it’s easy to get confused about which option is best for your business. What’s more, recent changes to UK tax law mean that the cost of funding fleet vehicles can vary considerably from one funding method to another.

The type of funding you choose can make a significant difference to your overall costs, risk and flexibility – so it’s crucial to understand everything properly before making your decision.

Here are some of the considerations:

  • Costs
  • Cash flow
  • Risk
  • Finance availability
  • Tax implications and Balance sheet implications

We work very hard to explain how the Fleet Funding market works and help you to understand more about the options available to you, and their impact on your business.

Because we work with such a wide range of businesses, we understand that fleet funding needs vary widely. You may want ways to release capital or reduce your tax liability for example?

Choosing the right funding method for your fleet depends upon a number of factors and each situation can be different. As a general rule, it is helpful to consider cars and vans separately.

Here are some considerations:

  • For Company Cars

    Where transfer of Residual Value risk is important:

    Consider contract hire or contract purchase (depending upon VAT recovery rate). Both provide Residual Value protection, but contract hire allows 50% VAT recovery on finance, and is currently reported off balance sheet

    Where Residual Value risk is not important:

    Consider finance lease (assuming on balance sheet treatment is acceptable)

    For Company Vans

    Where transfer of Residual Value risk is important:

    Consider contract purchase as this allows access to accelerated VAT recovery

    Where transfer of Residual Value risk is not important:

    Consider finance lease as this means the lessee does not need to worry about end of contract condition, and can often choose to run the vehicle over a secondary lease period for a nominal sum

    Business Contract Hire

    We provide a comprehensive range of products to suit any business, and we work with our customers to reduce costs and maximise the operational efficiency of their fleet. We have the experience to know what works best, taking into account recent changes in taxation and legislation.

    Contract Hire

    Contract Hire is a popular funding option with fleets of all shapes and sizes. Your leasing company purchases the vehicles you need and can also manage them for you. You pay an agreed, fixed monthly rental cost, with the option to include maintenance if you want it. At the end of your term, the leasing company sells the vehicles.

    Key advantages:

    • Fixed price motoring, benefiting from the leasing company’s purchasing power
    • No residual value or maintenance risk (if a maintenance contract is taken)
    • VAT benefits include 50% recovery for company cars; 100% recovery for commercial vehicles
    • Monthly lease payments are available for offset against corporation tax
    • PROS

    Key Features:

    • Your vehicles remain a business expense, but never appear on your balance sheet (Subject to current legislation reviews)
    • Enjoy fixed, lower monthly payments due to the VAT advantages of leasing
    • Operational costs are more predictable, so you can manage your fleet effectively
    • You can add ancillary services such as vehicle maintenance, Fleet Administration, or Duty of Care
    • You don’t need to worry about having to sell vehicles yourself
    • Your cash flow is freed up for you to use elsewhere in your business
    • Please be aware that there are cost implications if you terminate your funding agreement early (although this applies to all forms of funding) With Contract Hire you are able to choose from most makes and models of vehicles. Different cars and vans depreciate at different rates, you can often lease a more prestigious vehicle than you could get when purchasing, at the same monthly cost. It’s a flexible service, too – with some leasing companies you can change the agreed mileage or term length if should your circumstances alter.

    At Tyson Cooper, we strive to ensure that the recommendations are right for your business. With all Contract Hire vehicles – both cars and vans – you can take advantage of our useful extra services, all designed to take the hassle out of fleet management.

    Some of the services we offer are:

    • Roadside assistance
    • Technical support
    • Accident management
    • Fleet maintenance management
    Flexible Lease and Finance Lease

    Flexible Lease is designed to help you manage your short term vehicle requirements, this product allows you to Leasing a car for one week or up to six months and is ideal solution to cover for long term factory order times or to cover a new start employee until they complete their probationary period.

    With Finance Lease you can pay lease rentals to an estimated residual value at the end of contract and then benefit from any profit made on the sale of the vehicle, compared with the predicted figure.

    Key advantages:

    • VAT benefits include 50% recovery for company cars; 100% recovery for commercial vehicles
    • Finance Lease gives you the opportunity to benefit from potential profit on disposal
    • It is possible to pay most of the finance rentals up front, which accelerates your VAT recovery and reduces your interest payments as a result
    Sale and Leaseback

    Sale and Leaseback offers customers the opportunity to release funds by selling their owned vehicle fleet to us. We then lease the vehicles back to them releasing valuable capital for their business to use.

    Key advantages:

    • Frees up working capital tied up in vehicles
    • Enables the vehicle fleet to be fully outsourced to the lease provider
    • All of the operational benefits of contract hire apply (e.g. fixed price motoring, residual value and maintenance protection)
    • For commercial vehicles, the VAT charged on the monthly lease payments is fully recoverable
    • The leasing company will be able to obtain capital allowances on the transfer value of the vehicle and should reflect the benefit in the lease rate charged
    Personal Contract Hire

    Like Business Contract Hire (BCH), Personal Contract Hire (PCH) involves leasing a car for an agreed period of time at a fixed monthly cost. For private individuals that means cost effective, flexible motoring.

    The main difference between PCH and BCH is that the vehicle is funded by the individual rather than the business. As a result, the vehicle is not subject to Benefit in Kind tax.

    All servicing and maintenance can be provided – giving you peace-of-mind that everything is running smoothly with no unpredictable costs. 

    Features of Personal Contract Hire Are:

    • A comprehensive vehicle management package including (if selected) all servicing and maintenance
    • Flexible term and mileage options, tailored to your needs
    • We will ensure that you have complete support and guidance from the lender and for us at Tyson Cooper it is the long term relationship that we strive for, we want you to be delighted with the whole purchasing process and to have the peace of mind that we are here to support you in the life time ownership of your vehicle.
    How does PCH Work?

    Personal Contract Hire is a simple and designed to save you valuable time:

    • Choose from a multitude of manufacturers
    • Agree your contract term and mileage. Maintenance including tyres and servicing can easily be added as an option
    • An appropriate fixed monthly payment amount is confirmed for the duration of the term
    • Your car will be delivered via one of Tyson Cooper approved dealers

    At the end of your term, you simply return your vehicle back to the relevant funder. The vehicle should be returned in a condition that meets the BVRLA ‘Fair wear and tear’ guidelines, otherwise charges may be incurred, however we are happy to inspect/appraise the vehicle and advise accordingly to ensure that it meets with the returns policy. We can of course order your replacement vehicle to make sure that it ties in with the return date of your existing vehicle.
    If you are VAT registered, you may be able to claim VAT on the percentage of the lease that relates to business use

    What are the benefits of personal contract hire?...

    You choose the manufacturer and model of car that you want, and we purchase it and can also manage and maintain it for you – it’s very straightforward. All you do is pay one fixed monthly fee – keeping your costs low and predictable.

    • Hassle-free motoring – we will do all of the organizing for you
    • Flexible payment structure – from 2 - 4 years
    • Running costs e.g. Maintenance tyres and servicing, can be included for easier fixed budgeting
    • No risk of unexpected vehicle depreciation
    • Possibility to reclaim VAT and business expenses depending on your circumstances
    • The vehicle is not subject to Benefit in Kind tax
    • PCH gives you fixed cost motoring