A contract hire agreement is over a fixed-term and includes a number of maintenance options to suite the working needs of the customer. Asset Alliance retains ownership of the vehicle and the end-of-life risks. Contract hire is an off balance sheet arrangement and therefore has no capital tie-up. It allows for particularly accurate budgeting and is often a tax efficient way for businesses to finance their trucks and assets.
Spanning a fixed-term, operating leases are a popular finance method that includes the option to buy or extend the lease at the end of the contract period. Operating lease is the opposite to contract hire in that it offers no maintenance or basic asset management. There are tax benefits though, as the lease allows you to deduct its costs as an operating expense.
Flexihire is Asset Alliance’s own rolling 12-month rental contract. It is a type of operating lease but contracted over a shorter period. These loan arrangements are typically structured to support businesses that need their fleet size to increase or decrease according to specific contracts and their own fleet management needs. A short term rental therefore reduces the risk of taking a longer three to seven year contract on the asset.
The simplest, most short-term needs can easily be met with Asset Alliance’s spot rental service. With no minimum rental period, a spot rental is ideal for when a vehicle is off the road, as well as fill a much-needed gap in the event of a short term or unexpected contract opportunity.
A finance lease from Asset Alliance is calculated across the total remaining cost of the asset returned at the end of the agreement and upon sale of the vehicle as a “rebate of rental”. Monthly repayments are generally higher which may provide greater tax efficiencies when deducted from annual expenses, especially as the rebate is received at the end of the contract – which can then be typically reinvested in the next hire or purchase of a new asset.
If you want to end up owning the vehicle and assume all the costs and responsibilities for maintaining it yourself then hire purchase is option to take. It is an “on balance sheet” cost which means VAT must be paid upfront but you can deduct the capital costs which can suit some businesses.
As well as providing a range of finance offers, Asset Alliance also has a fleet management option for its contract hire customers. An outsourced management service can be incorporated into your finance package to make sure that maintenance and safety compliance are all in place. The fleet management option also covers fuel management, servicing, accident management, charging and overall efficiency monitoring. The Asset Alliance fleet management services is there to keep fleets and drivers legal and efficient on the roads.