A fully managed solution for company vehicles
Whilst there is no right or wrong way to finance a vehicle fleet, many of our customers are drawn to the benefits that contract hire can bring to their business.
Too many of our customers their company image is very important. The appearance of their vehicles says a lot about their business. Contract hire is one of the most cost-effective ways to have access to the most modern and efficient vehicles on the road.
Risk is another area that businesses are keen to reduce exposure on, particularly given the current financial climate. With contract hire, the user doesn't have to incur costs relating to depreciation and disposal of vehicles at the end of their useful life.
For the VAT registered business, contract hire is one of the most VAT efficient ways of financing their vehicles as a large proportion of the VAT payments can be reclaimed. VAT recovery is 100% on contract hire rentals for vans and whilst only 50% of the finance rental VAT on cars may be recovered, 100% VAT recovery on the maintenance element of the contract hire payments on a car is achievable.
Contract hire is an ideal way to fix motoring costs and take advantage of parts and labour rates at the time of agreement - these are fixed regardless of what happens in the marketplace. The added advantage of contract hire is the ability to include a full maintenance package into the monthly costs, there by keeping the fleet well looked after and it allows the business to avoid unplanned motoring bills. The comprehensive provision of tyres, servicing and other consumables allows for greater cash-flow control and reduces a lot of the hidden costs that are often associated with other forms of fleet funding such as employees having to organise their own service and repairs.
Residual values, the fixed predicted end value that Lombard sets from the outset, are the key driver in determining how much a vehicle will cost on contract hire. Strong residual values generate more competitive rates and this allows a business to consider vehicles that at first glance would appear too expensive to run as part of their fleet. This, coupled with the small initial outlay, means that a business can get the vehicles they really need whilst minimising capital outlay.
However, perhaps the most compelling reason for a business to consider contract hire is the reassurance that Lombard can take care of the sourcing, purchase, maintenance and disposal of the business vehicle. This takes away a lot of the day-to-day hassle that often comes with managing a fleet internally and allows our customers to do what they do best and that's running their business!
