Helping you choose the right finance package

DSG Auto Contracts - Finance optionsOnce you have decided on the type of new or used car or van, the next important decision is which finance package suits your personal or business needs.

At DSG Auto Contracts we understand that this can be daunting not to mention time consuming. We are committed to helping you understand the many car leasing and contract hire options available to you whether you are researching the best solution for a larger fleet, small business, for personal use or as a company car driver. As we are committed to our Best Price First Time policy you can be reassured that you will be provided with the most competitive car and van contract hire and leasing deals.

Our team will offer you advice on the most tax efficient ways to finance your new vehicle(s). Whilst we take care to ensure that our team are suitably qualified to discuss business agreements, we would suggest that you share the recommendation with your accountant who understands your business needs more intimately.

How much information do you or your business need? - It's up to you

Take a quick glance at each of the car and van leasing, finance and contract hire methods with the summaries below. However, if you wish to understand more about the individual financial options, then simply click on the PDF icon at the end of each of the summaries and read or download our comprehensive overview. We have included a comparison checklist of all funding methods on each of the PDF downloads for your convenience.

Helping you to understand our finance options

Contract Hire (Hire Agreement)

What is Contract Hire?

Contract Hire is a method of hiring either a new or used car or van for use over an agreed time (between 24 and 60 months) and agreed mileage (usually up to 150,000 miles). As this is a Hire agreement the ownership of the vehicles remains with the finance company.

The agreement will require a fixed monthly rental (often referred to as an Operating Lease). Additional services can be included to your rental including:

  • Servicing
  • Maintenance
  • Tyres
  • Road Fund Licence

Who should consider Contract Hire?

This method of funding is more appropriate to VAT registered businesses.

To understand the benefits of Contract Hire including our quick glance comparison chart and the
implications of VAT and tax then download our comprehensive PDF version

Finance Lease (Hire Agreement)

What is Finance Lease?

Finance Lease is a contract where the car or van is hired, and there is no pre-planned opportunity to purchase the car. The title of the car or van is never passed from the finance company to the business hiring the vehicles. The agreement, will therefore, show on the balance sheet as a leased asset with a corresponding liability. However, the business will benefit from the residual value risk or reward at the end of the agreement. There are two types of Finance Lease to choice from:

  • Residual Value Lease - providing fixed monthly payments over the period of the contract followed by a balloon payment.
  • Fully Amortised Lease - on this type of lease the monthly payments account for the entire value of the vehicle over the contract period.

Who should consider Finance Lease?

This agreement is tailored to VAT registered businesses which prefer a flexible rental agreement.

To understand the benefits of Finance Lease including our quick glance comparison
chart download our comprehensive PDF version

Business Contract Purchase (Purchase Agreement)

What is business contract purchase?

This funding method combines the benefits of fixed prices with the operational benefits of Contract Hire. It allows the vehicle (s) to be purchased at the end of the contract period for a pre-determined payment (balloon payment).

Who should consider Business Contract Purchase?

This finance method is more suitable to businesses with high value vehicles (over 12,000) avoiding the issue of restricted tax recovery that are found on Hire Agreements.

To understand the benefits of Business Contract Purchase including our quick glance comparison chart
and an explanation of Balloon Payments please download our comprehensive PDF version

Personal Contract Hire (Hire agreement)

What is personal Contract Hire?

This is a new scheme which has been designed for individuals who have; opted out of the company car scheme; taken a car allowance or for personal drivers who would just like to have fixed cost motoring.

Personal Contract Hire is a budget friendly alternative to traditional funding methods including personal loans and hire purchase. It avoids the need for large deposits associated with traditional funding methods as you simply hire the car for a fixed period and hand it back. It also has the flexibility to include additional services such as servicing, general repairs, tyres and road fund license to the contract so that you only have to sort out the insurance and fuel.

Who should consider Personal Contract Hire?

This finance option is suitable for personal drivers and company car drivers who have opted out of their car scheme (however we do advise if your car is being used for business travel please ensure that you notify your insurance company).

To understand the benefits of Personal Contract Hire including our quick glance
comparison chart download our comprehensive PDF version

Personal Contract Purchase (Purchase Agreement)

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase or sometimes referred to as PCP is another flexible way to finance vehicles. This finance option provides motoring at a fixed cost, so each month's expenditure is known.

You simply select the car you want, how long you want it for and the anticipated mileage that the car will complete.

This finance option allows you to opt to pay for a balloon payment at the end of the contract and purchase the car or to just hand the car back.

Who should consider Personal Contract Purchase?

This finance solution is more suited to personal drivers who want to avoid depreciation or disposal risk and manage their finances more efficiently.

To understand the benefits of Personal Contract Purchase and to understand more
about Balloon Payments download our comprehensive PDF version

The information provided is for guidance only. We recommend that you seek professional advice from your accountant and tax office before making a decision based on the information given.

Inland Revenue has a guide to personal and company taxation which may be helpful to you.

DSG Auto contracts accepts no legal liability for the information given as it has been provided for illustration only and it is your responsibility to check the validity of this with the relevant authorities.