July 20, 2012

Contract purchasing and hiring of fleet cars at LEXUS

Contract purchasing and hiring of fleet cars at LEXUS


 

LEXUS offers the option to hire or purchase their fleet cars. Here’s a brief note on the options:


 

Contract hiring of fleet cars:


 

If you opt for the contract hiring of fleet cars option one can simply enjoy the benefit of using the LEXUS vehicle for an agreed period and upon expiry of the said period it is to be returned subject to certain terms and conditions. The period of repayment and the expected maximum mileage limit is fixed by the client availing the service, based on these factors LEXUS will set a certain number of rentals a portion of it being in the form of down payment.


 

Pros of hiring option:


 

• No worries concerning depreciation of the vehicle
• There is no fixed responsibility towards disposal of the vehicle
• It has pre fixed rentals thus allows easy and efficient planning of the budget
• The maintenance package option helps to prevent unexpected costs and moreover 100% VAT can be reclaimed in case of maintenance charges
• The rentals charged are deductable expenses for taxation purposes
• VAT registered business concerns can reclaim 50% VAT on the rentals charged
• Renewal of road fund license is included during the contract term


 

Cons:


 

• During the contract period the client has full right to use the car but does not have ownership


 

Contract purchasing of fleet cars:


 

Under the option of contract purchasing of fleet cars the client agrees upon a fixed deposit amount. The amount can have an upper limit equal to 35% of the price of the LEXUS vehicle. LEXUS in return will fix a minimal future value for the car. This value indicates the worth of the vehicle with them in the future. From the total cash price the deposit amount along with this guaranteed value is deducted. The monthly repayments are calculated on the differential amount along with the interest charges. This method makes the purchase more affordable and economical as against the regular hire purchase agreement.
At the end of the agreed period the client can exercise any of the below mention options:
He can pay up the guaranteed future value and retain the car or
He can exchange the car for newer model or
He can do the final payment and return the car subject to certain conditions


 

Pros of Contract purchase:



• With this option you can either opt for a new car or upgrade the existing with additional accessories all at affordable monthly payments
• Thus you can drive a new car more often at very low maintenance cost as you will be covered under warranty period more often
• The interest rates charged under this method is fully deductable for tax purposes and the value of the car can be a part of the balance sheet asset record.
• This method is highly beneficial for non-VAT registered business concerns.
• Since rental payments are fixed there are no hidden costs and you have the liberty to choose the repayment term.



For More Information Visit : http://www.lexus.co.uk

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