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Contract Hire and Leasing Guide

  • About Pre Registered vehicles

    Advantages of Pre-registered vehicles

    Pre-registered vehicles, or pre-reg cars, present an intriguing option for potential car buyers, blending the allure of a new vehicle with the financial advantages usually associated with used cars.

    These vehicles are initially purchased and registered by dealers or leasing companies, mainly to secure bulk purchase discounts from manufacturers. This practice serves several purposes, including helping manufacturers manage inventory and market share, as well as clearing out old stock in anticipation of new model releases, all without undermining the official recommended retail price.
  • Benefit-in-Kind (BIK) rates April 2024 2028

    Benefit-in-Kind (BIK Update April 2024 to 2028

    The structure of company car tax, known as Benefit-in-Kind (BIK) rates, is set for significant changes from April 2024 to 2028, reflecting the UK government's continued push towards electrification of the vehicle fleet and environmental sustainability.

    These changes are intricately designed to incentivize both the adoption of electric vehicles (EVs) and the use of vehicles with lower CO2 emissions, aligning with broader climate change targets.
  • Benefits of Maintenance

    Benefits of contracts with full maintenance

    Fully maintained contracts are a beacon of convenience and reassurance in the world of vehicle management, offering a seamless solution to handle unexpected maintenance bills while facilitating precise budget planning for company car maintenance costs. This holistic approach to vehicle maintenance not only provides peace of mind but also introduces a level of financial predictability into an otherwise variable expense area.

    Companies and individuals alike are encouraged to weigh the benefits of contracts with full maintenance against those without, to ensure they select the option that most closely aligns with their motoring needs and financial strategies.
  • Business Account Eligibility

    Account application criteria explained 

    Navigating the process of securing a business account for contract hire and leasing agreements can seem like a daunting task, but understanding the eligibility criteria can simplify the journey.

    Fundamentally, these agreements are a form of credit provided by financiers to businesses—including limited companies, sole traders, LLPs, and PLCs. The approval of such accounts hinges on the customer's credit status and the cost of the vehicle, despite the vehicle remaining the property of the financier from the start.
  • Business Contract Hire

    Benefits of Business Contract Hire

    Business Contract Hire (BCH) presents an appealing option for companies looking to manage their vehicle fleets efficiently and cost-effectively. It suits a wide range of businesses, from small enterprises to large corporations, especially those that are VAT registered. This method of acquiring vehicles is favoured for its simplicity and financial predictability.

    Through platforms like All Vehicle Contracts, businesses can effortlessly compare various Contract Hire deals, ensuring they find the best fit for their specific needs. The ability to tailor contracts based on monthly budgets and annual mileage adds a layer of customization that is highly valued in the corporate world.
  • Contract Hire with Maintenance

    Contract hire with maintenance benefits

    Contract hire with maintenance offers a comprehensive solution for businesses and individuals seeking a hassle-free approach to managing vehicle expenses. This type of agreement provides a fixed cost for motoring, covering all servicing and maintenance costs, thereby eliminating the risk of unexpected bills.

    This predictability is a significant advantage, allowing for more accurate budgeting and financial planning. The inclusion of costs such as additional servicing, maintenance, road fund licence, tyre replacements, and the current MOT certificate ensures that vehicles are kept in optimal condition without any hidden expenses.
  • Contract Hire without Maintenance

    Contracts without maintenance

    Choosing between contract hire or personal contract hire with or without maintenance is a significant decision that impacts your financial planning and peace of mind during the lease term. A contract without maintenance might initially seem less expensive because it comes with lower monthly payments. However, this option transfers the responsibility of servicing and maintenance costs directly to you, the customer. This means that every routine service, unexpected repair, or tire replacement due to wear and tear becomes an out-of-pocket expense. Given the variability of maintenance needs over time, this can lead to unforeseen financial strain.
  • Contract Vehicle Return Policy

    All Vehicle Contracts is a member of the British Vehicle Rental and Leasing Association (BVRLA) and subscribe to the standards recommended by the British Vehicle Rental and Leasing Association (BVRLA), which are also widely used as a benchmark in the vehicle industry for all major contract hire and rental companies.

    We set out to generalize what is acceptable and what is unacceptable as follows and as recommended by the BVRLA in relation to contract end vehicle return. Vehicle return terms and conditions will be detailed on the relevant documentation appertaining to yours or your company’s agreement.
  • Effective Leasing Rental

    Effective rental here's how it works

    The concept of "effective rental" plays a crucial role in understanding the financial implications for VAT-registered businesses when entering into contract hire or finance lease agreements. This terminology is pivotal as it encapsulates the true cost of monthly rentals for such businesses, taking into account the nuances of VAT (Value Added Tax) recovery. Specifically, effective rental is defined as the gross contract hire or lease rental amount plus 50% of the VAT on that rental. This calculation is significant because, in many jurisdictions, businesses can reclaim VAT on certain expenses, thereby affecting the actual cost incurred
  • Finance Lease

    How Finance lease works

    Vehicle finance leasing presents an intriguing and efficient avenue for businesses in the U.K. to acquire new vehicles without the hefty price tag of outright ownership. This financial solution has its roots in the 1800s and has evolved to become a cornerstone of equipment finance globally, catering not just to smaller assets but to substantial investments like vehicles, aircraft, and even power plants.

    For companies that are VAT registered, whether small, large, or partnerships, vehicle leasing in the U.K. offers a cost-effective strategy to update or expand their fleet, especially for assets like vans and commercial vehicles that tend to depreciate rapidly.
  • Flexi Lease

    Flexi leasing

    Flexi leasing presents a dynamic and flexible option for businesses looking to manage their vehicle needs without the full commitment of ownership.

    This type of leasing is particularly beneficial for businesses that require the use of vehicles for varying lengths of time and for different purposes, offering a financially viable solution that aligns with the need for cost-effective motoring and capital efficiency at the end of the lease term.

    One of the key advantages of Flexi lease is its adaptability to high-mileage situations and the use of vehicles in demanding conditions, which are common scenarios in commercial and specialist vehicle operations.
  • Initial payment jargon

    Initial payments. Points to consider

    The allure of advertised car and van leasing deals, with their low monthly payments juxtaposed against substantial initial payments, certainly grabs attention. However, it's crucial to delve deeper into these seemingly attractive offers to understand their true nature and implications. Typically, these deals require a large upfront payment, often equal to 12 months of payments, effectively elongating a 3-year lease to the financial equivalent of a 4-year commitment. This setup might initially seem beneficial, but it’s worth considering alternatives, such as a more manageable 1-month advance followed by 47 payments. Such an arrangement could offer a more balanced cash flow over the lease term.
  • Lease mileage information

    How contract Mileage works

    Navigating the world of car leasing can often feel like trying to find your way through a maze of fine print and enticing offers. Advertised headline leasing deals frequently catch the eye with their seemingly low monthly payments and large initial payment terms. These deals often come with the caveat of low mileage limits, designed to showcase the minimum possible cost of leasing. However, this approach can be misleading for consumers whose driving needs exceed those minimal allowances. It's here that AVC's transparent approach to car leasing becomes invaluable to discerning drivers.
  • Lease Purchase

    Lease Purchase and Hire Purchase

    Lease Purchase and Hire Purchase agreements offer two distinct pathways for financing the purchase of a vehicle, each with its own set of benefits, tailored to meet different financial needs and objectives. Understanding the nuances between these two options can empower individuals to make informed decisions that align with their financial situation and vehicle usage plans.
  • Payment Profiles for Leasing

    Understanding leasing payment profiles

    Understanding leasing and Contract Hire initial payments, payment profiles, and the associated jargon can seem daunting at first, but with a bit of clarification, it becomes much clearer.

    When entering a Contract Hire agreement for a vehicle, the initial payment is a crucial component to consider. It's typically expressed in terms of the number of monthly payments made upfront.
  • PCP fair wear and tear guide

    PCP fair wear and tear guide

    If you choose to return your vehicle under the terms of your PCP agreement the finance company will expect the vehicle to be returned in good condition and serviced to the manufacturer’s standard.

    Fair wear and tear is acceptable so to avoid confusion, we have set out to define what is acceptable and what is unacceptable.

    Acceptable vehicle return standards

    Windscreen and windows - Surface chips with no spreading cracks, professionally repaired minor chips
  • PCP Personal Contract Purchase

    Benefits of Personal Contract Purchase (PCP)

    Personal Contract Purchase (PCP) is a versatile and increasingly popular method of vehicle financing that offers a blend of affordability and flexibility, making it an attractive option for many drivers. Unlike traditional hire purchase agreements, PCP allows for lower monthly payments because it factors in the vehicle's Guaranteed Minimum Future Value (GMFV), also known as the balloon payment, at the end of the agreement term.

    This innovative approach to car financing means that consumers can enjoy driving a newer vehicle for a lower monthly outlay, with the option to purchase the vehicle at the end of the term, part-exchange it for a new one, or simply return it to the dealer.
  • PCP Vehicle return guide

    PCP ( Personal Contract Purchase ) offer an option for you to return the vehicle if you do not wish to purchase it, part exchange or arrange your own sale at the close of the PCP agreement.

    If you choose to return the vehicle, the finance company will require the vehicle to be in good order and in a condition that is relative to the vehicles age and mileage, and serviced in accordance to the manufactures requirements. Fair wear and tear is acceptable but you may incur recharges for any items that are not classed as fair wear and tear.
  • Personal Account Eligibility

    Navigating the world of vehicle finance, particularly through options like Personal Contract Hire (PCH) and Personal Contract Purchase (PCP), can be a complex process, but understanding eligibility criteria and your rights under the Consumer Credit Act 1974 can simplify this journey. These financing options offer an appealing alternative to buying a vehicle outright, allowing consumers to lease or potentially own a vehicle after fulfilling certain conditions. However, to access these financial products, potential borrowers must first meet specific criteria set out by lenders to demonstrate their ability to maintain regular payments throughout the term of the agreement.
  • Personal Contract Hire

    About Personal Contract Hire

    Personal Contract Hire (PCH) represents a compelling choice for individuals seeking a hassle-free method to acquire a vehicle for personal use. By encompassing VAT within the monthly hire payments, PCH simplifies the process, making it an attractive option for those opting out of traditional company car schemes in favour of a cash allowance. This approach to vehicle acquisition is designed to offer the flexibility and convenience of having a car without the commitment of ownership, with the added benefit of VAT-inclusive pricing which can be particularly advantageous for personal users.
  • Personal Contract Hire with Maintenance

    Personal Contract Hire (PCH) with maintenance 

    Personal Contract Hire (PCH) with maintenance is an attractive option for individuals seeking a hassle-free way to enjoy a new vehicle without the worry of unexpected maintenance costs. This all-encompassing lease agreement not only covers the cost of the vehicle over a set period but also includes comprehensive maintenance packages.

    These packages ensure that all servicing needs, replacement parts required to meet the manufacturer’s recommendations, road fund license for the duration of the contract, and even tyre replacements due to normal wear and tear, are fully covered
  • Vehicle fair wear and tear guide

    Vehicle fair wear and tear guide

    All Vehicle Contracts is a member of the British Vehicle Rental and Leasing Association (BVRLA) and subscribe to the standards recommended by them. These standards are widely recognised as a benchmark in the vehicle industry for all major contract hire and rental companies.

    Below is a generalised guide as to what is acceptable and what is unacceptable as recommended by the BVRLA in relation to contract end vehicle fair wear and tear.

    Acceptable vehicle return standards

    Windscreen and windows - Surface chips with no spreading cracks, professionally repaired minor chips
  • Vehicle Order Process

    Pre Contract Order

    All Vehicle Contracts simplifies the journey to getting your new vehicle, making it a seamless and personalized experience. The initial step in this journey begins with what is known as a pre-contract order. This initial phase is crucial as it establishes the foundation of your agreement, linking your chosen vehicle to the most appropriate financing option.

    This could range from business leases and personal leases to contract hire or Personal Contract Purchase (PCP) finance. The flexibility inherent in this process means adjustments can be made as often as necessary. This ensures the vehicle and its specifications are perfectly aligned with your needs before moving forward.