SMG Leasing - Finance

Financing Options

CONTRACT HIRE

What Is It?
Under Contract Hire, vehicles continue to be owned by SMG Leasing yet are hired to you for a set period of time and at a fixed monthly rate. This method of finance can be useful for companies wanting to free up credit lines or improve cash flow by implementing fixed cost fleet operation.

How Does It Work?
The monthly rental charged is calculated based upon the cost of the vehicle, the contract period and the anticipated resale value. It is also takes into consideration the predicted mileage, service and maintenance costs, together with any additional services such as relief vehicles.

Under a Contract Hire agreement SMG Leasing retains ownership of the vehicle at all times and therefore continues to absorb the subsequent risks such as unforeseen running costs and uncertain resale values.

How Is It Accounted For?
Rentals paid on vehicles under £12,000 are fully deductible against corporation tax. However, for higher priced vehicles only a proportion of the payments can be offset.

Where a vehicle has a partial private use then 50% of the VAT on rentals is recoverable, whereas the service and maintenance elements of the rental are fully recoverable.

Vehicles under Contract Hire are not recorded as assets on the balance sheet, thus improving company gearing ratios.

Our approach to Contract Hire is one of total transparency and genuine partnership. SMG Leasing's Open Calculation service provides a fleet funding and management solution where ALL costs are visible from the start and any end of contract savings on maintenance budgets or profits on the sale of vehicles are returned to you.

We manage the purchase, maintenance, repair and disposal of each vehicle. All costs are clearly displayed at the outset of the contract including interest margins and management fees. If there are any losses to absorb then SMG Leasing takes full responsibility for them, meaning you never have to worry about hidden charges or unexpected bills.

We use all of our experience and expertise to design, develop and deliver industry leading fleet management solutions. This includes intuitive online applications for quotation, ordering, management and reporting. Our proactive approach means we are always looking for ways to help reduce your fleet costs and with Open Calculation, these saving are passed directly on to you.