Vehicle Funding: What Solution Suits You Best?

Be it a small or a large fleet, managing a fleet would always require expert management to cut off expensive costs. Keep in mind that different types of vehicle funding have different tax implications. The difference may also depend on the type of vehicles being managed. Still, vehicle solutions will always depend on what your company needs.  If your idea of vehicle funding is simply to cut off costs or improve the overall management process, knowing these types of funding solutions will help you know what’s best to answer your needs.

Contract Hire

Often referred to as vehicle operating lease, contract hire is very much advisable to limited companies, sole traders or partnerships. This type of funding solution involves leasing a vehicle for a fixed period of one to five years as well as a fixed mileage in exchange for a monthly fee. This kind of solution is fairly efficient if you want an improved cash flow and ROI as well as an effective administration and operation.

Sale and Lease Back

This kind of vehicle funding is much like contract hire. However, you have to sell first your vehicle to a trusted fleet company and continue their use under a new finance contract; this is where contract hire comes in. This kind of vehicle funding provides you a quick way of generating extra capital for reinvestment and reduces the problem and risks involved in owning a vehicle.

Fleet Management

If a single vehicle is difficult to manage, how much more a fleet of it? But not to worry though, an expert fleet management will ensure that not only will your company retain fleet ownership, running it will be easy for you too. If you don’t want to deal with risk management, services and maintenance, buying and selling as well as taxation that come with managing a fleet, hiring a trusted fleet management company would be your best funding solution.

Contract Purchase

If you want to avoid disbursing VAT on devaluation and funding, a contract purchase is the perfect choice for you. This is a kind of hybrid financing agreement that lets you purchase the car back at the end of the contract for a price decided in advance. This type of vehicle funding requires low initial payment with the benefit of low risk resale values, fixed monthly rental payments and removed risks of expensive running costs.

Finance Lease

This method of leasing provides you funding for any kind of vehicle you might need without being charged for extra services rendered like maintenance and services. Since finance leases are either fully amortised or a balloon lease, you may choose to pay a balloon payment at the end of the contract or reimburse the entire capital fee plus charges while retaining the vehicle’s value risk at full resale.

Salary Sacrifice

Providing car benefits to your employees only show that you are committed to their needs to do their job well. Salary sacrifice is the best funding solution for companies to support sustainability, lessen occupational road dangers by providing fully maintained new vehicles that are affordable for employees. For the employer’s benefit, salary sacrifice reduces the costs for National Insurance and helps you save with regards to income taxes.

Now that you know the different funding solutions you can have for your fleet, challenge yourself to be part of ALD’s one million car milestone and experience success with managing your vehicle funding needs.


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