Corporate renters have been warned they will face increasing daily rental rates for the next two years at least.
Experts at Avis UK car hire have been analysing market data and found that rates had increased by between 5-10% over the past two years and will steadily increase throughout 2011 and into 2012.
Commercial Director Antony Ainsworth said:
“We found that the market as a whole has moved rates up as a consequence of rising input costs and a greater focus on the segments they serve. There is an element of starting to charge more realistic daily rates so we can maintain investment in the levels of service customers expect.”
ING Rentals concurred with the findings of Avis saying that they had found an increase in holding costs had added around 2% onto costs however sourcing costs saw an increase of up to 8% on automatic vehicles and an all around 5% increase on van hire. ING also revealed that the models that they have had the most difficulty sourcing were Ford Mondeos and Vauxhall Insignias.
Short term rental is a good option if you are wanting something for a few days, however for any long period of time you might be better off looking at contract hire deals, with this type of deal you can choose your vehicle rather than just a band or range. Contract hire deals also offer a degree of flexibility and can include servicing and repair costs.
As a business owner you are also entitled to claim back as much as 50% VAT back on the vehicles. Contract hire deals can also be broken down to a per mile cost,meaning that you know exactly how much you’re paying, this is especially handy if you are running a fleet of vehicles. For example the most popular rental brand currently on the market is Audi, a brand new Audi A4 could cost you as little as £125 per month if you are covering 10,000 miles or less. Obviously this is based on an economical driving style.
Source – Business Car
Suzuki UK has announced an in house contract hire scheme in a bid to enhance the corporate sides of the brand.
The new program will allow the existing 150 dealers nationwide to give business and fleet customers a hire quote tailored to individual needs.
Rental contracts will be available with or without maintenance but customers who select the maintenance package will have all mechanical and routine services included, replacement battery and exhaust systems when requried and the benefits of a ‘no quibble’ tyre replacement policy.
Suzuki have promised that rates will be competitive and based on the same terms that they offer their vehicles to other contract hire companies.
Ian Price, General Sales Manager for Suzuki UK said:
” Suzuki is an established brand in the UK offering a wide range of fun to drive and efficient cars, the launch of the new scheme allows us to reach even more customers than before; further developing our presence in the important Fleet and Business sectors.”
Despite this many experts recommend that customers either fleet or personal research and look at other contract hire sites to try gauge the market, and use the tools these sites offer. This can not only find the you the best price but also show you local companies, many of these sites also offer a rating system so you can get an indea of the quality of service offered.
Source – CarPages
A personal contract hire is a type of long-term rental that allows individuals to acquire vehicles conveniently and cost-effectively. It is a great option for motorists who prefer to change cars every couple of years and find outright vehicle purchases unaffordable.
In contract hire leasing, the individual (lessee) leases the car for a certain time period (1 year- 5 years) and makes fixed lease payments on a monthly basis. At the end of the lease term, the lessee has the option to return the vehicle or buy it. The lease payments will include VAT, which the lessee cannot reclaim. It is claimed back when the lease company purchases the vehicle.
The benefits of personal contract hire leasing include the flexibility to plan budgets more easily owing to the fixed monthly fee. The monthly installments will include the maintenance costs associated with the vehicle.
The lessee doesn’t have to worry about ownerships risks as the leasing company owns the car even during the contract term. The lessee does not have to deal with hassles related to vehicle disposal or sale, which is not the case when the vehicle is purchased. The vehicle’s depreciating value over time is also not a concern for the lessee.
Business contract hire is a form of leasing which works much like a long-term rental. Here, the leasing company provides the business with a car, van or multiple vehicles in return for a fixed monthly payment. One of the contract terms will be the allowance on mileage allowed on the leased vehicles.
Businesses can choose a lease term extending from a year to up to five years. At the end of the lease term, the vehicle(s) can be returned and new ones can be leased. Business contract hire allows businesses to stay competitive in terms of motoring costs and plan their budgets better. Besides monthly lease payments, business will only be required to buy insurance and pay towards fuel costs.
Business contract hiring also offers businesses significant tax advantages. When a company buys a car, then the vehicle is viewed as a company asset and taxed. The costs of acquiring vehicle thorough a contract hire are not viewed as balance sheet costs and not tax liable.
As the leased vehicles are covered under factory warranty, the associated repair and maintenance costs are also less. The costs benefits of contract hire have made this a much preferred leasing option for many businesses.
A contract hire lease allows businesses to acquire even expensive vehicles at lower costs. The costs of purchasing multiple delivery trucks or cars can cost a business a small fortune. Contract hire is a great way to source multiple vehicles and stay cost competitive.
In a contract hire, lease monthly payments are made to the leasing company. These payments are smaller than the loan payments the business would have to make if it had purchased the vehicle(s).
Contract hiring is a hassle free leasing option that frees businesses from taking on the risks of buying and running their car or van fleets. Businesses don’t have to deal with the depreciation risks that an owned vehicle brings. The hassles and risks of vehicle disposal are taken care of by the leasing company. The company may charge businesses a disposition fee in lieu of this and the costs of selling the returned vehicle.
The costs to finance the vehicle are less as the leasing company recovers the value added tax (VAT) on the vehicle. This saving is reflected in the monthly lease payments. An understanding of the benefits of contract hire lease can help new businesses manage their costs better and prevent an unnecessary outflow of cash.
Businesses opting for a contract hire lease should keep in mind the terms and conditions that such a lease contract stipulates. The terms can be negotiated only when the lease is initiated and not upon signing it or in to the lease term.
The lease term is fixed and the only way to get out of the lease early is by paying a termination charge. The termination fee charged varies between different leasing companies. The mileage allowance set for the particular vehicle make and model is also fixed. Exceeding the mileage allowance laid down by the contract hire lease contract attracts a charge. In fact, a charge is levied for every mile exceeded. Businesses have to keep this in mind to ensure they don’t rake up costs at the end of the lease term.
The contract hire lease contract can come with a maintenance or non maintenance clause. In the latter, all vehicle damages have to be taken care of by the lessee. Some leasing companies also offer vehicle car breakdown coverage as part of the leasing contract. The businesses leasing the vehicle(s) should take care to maintain them well and in accordance with the automaker’s servicing schedule.
It is important that a business opting for a contract hire lease understands the many aspects of such a lease. Here are some things a lessee should consider when going for a contract hire.
The tax relief that businesses can get is impacted by the CO2 emissions of the leased company cars. A restriction of 15% is levied for cars acquired through contract hire lease that have emission figures of above 160g/km. This comes under the high carbon emission category and therefore offers less tax benefits to the lessee. So, the running costs associated with leased vehicles that have CO2 figures of over 160g/km are more. No such restriction is imposed on leased vehicles that have CO2 figures of under 160g/km.
Businesses have to insure the car or truck in accordance with the requirements laid down by the leasing company. For a leased vehicle that is written off due to any reason, the lessee may have to pay the difference amount between the book value of vehicle (as determined by the leasing company) and the insurance company payout.
Vehicle maintenance is another important aspect that businesses should keep in mind. A leased vehicle that is returned in a damaged condition will attract a charge.
This is written at a time where a potential hung parliament is dominating the news and who is going to govern the country and what policies will dominate the country is the bigger picture. But we all have our own smaller agenda, what will the picture be for the contract hire or lease market? How will interest rates be affected, even though car manufacturing is currently up, will any cuts in spending reduce the amount new cars bought, or for that matter will businesses and private buyers decided just to hang on with the purchase of their new car, either leased or bought?
As many people are glued to the TV. either wondering or hoping for a slid final solution so at last they know where they stand, only the bloggers and media guys seem to be busy. This is an unprecedented day, where for most the company vehicle purchase is down the list of priorities.
The country should be a wsh with low interest rates as the Bank Of Englands standard rate is still the lowest it has ever been, but motorists are struggling to find low rates when it comes to buying a car, according to the Mail On Sunday. the best rate they could find was 8%+ in order to buy that dream car. The bansk still do not want to lend money for a purchase that will just depreciate, they are expecting a high dpeosit also. This of course is hurting the retail arm of used and new cars as few people have the cash to buy outright.
The motor car is normally the second most exensive purchase you will make and so many financial experts believe if you can get a contract hire on a low interest rate, then it makes sense not to have to worry about resalesbale value and let the dealership have this responsability. Of course contract hire is also a finance agreement, so often is directly related to the availability fo finance. As officially we are supposed to be out of reccession, the worry is that interest rates rise not get less, so we need to keep an eye on how it will affect retail sales and the contract hire market.
If you are thinking of a cost effective option for meeting your driving needs, getting a suitable vehicle through a contract hire is one of the smartest options you can go for in today’s times. With a large number of car lease companies offering the latest models of automobiles at amazing bargain deals, there has never been a better way to having a great driving experience than hiring your dream car.
Contact hire is a general term of reference used for the system for leasing a vehicle from a car hiring company for a fixed period for individual as well as commercial needs. Listed below are some unique features that make leasing a vehicle a greatly beneficial option as compared to owning a car:
1. Wide range of options – One of the best features of getting a vehicle through contract hire is that customers can choose from the latest and the best selling models available in the market ranging from city cars, SUV’s, sports cars to top end luxury brands.
2. Cost effective choice – Compared to buying a car, leasing one is a highly cost effective choice as there are no heavy investments and loans involved, especially when it comes to high end models as customers need to pay for only a fixed amount of time through contract hire.
3. Flexibility to switch models – Another great feature of availing car lease services, is the unique benefit of switching models as per your wish which is otherwise extremely difficult if you own a car as you would have to deal with the hard task of reselling the previous vehicle before opting for a new one.
4. No vehicle maintenance – By getting a vehicle through contract hire, customers do not have to bother with the hassles of vehicle maintenance as the car repair and upkeep services are taken care of by the leasing company.
5. Easy payment options – Contract hire, also gives customers the benefit of easy payment options which can range from a small down payment to monthly installments based on the period of lease as well as the users choice.
6. Secure transaction – When you opt for a vehicle through contract hire, you can be rest assured about the security of the transaction as the company will make you sign a legal contract and ensure that you are well aware of its terms and conditions before leasing a suitable car.
Contract hire is one of the smartest ways of meeting the lifestyle and driving needs of today’s times. So go ahead and lease a suitable vehicle and enjoy an amazing driving experience at a great bargain deal.
Summary – Opting for contract hire is a wise and cost effective way to meet the diverse driving needs in today’s times. Some unique features of leasing a suitable car include the wide range of options, cost effective deals, flexibility, no maintenance, easy payments and secure transaction process.
By guest blogger Atul