Without doubt, we are hearing more and more about vehicle leasing being the most cost effective and hassle-free way to drive a brand new car or van, but should you opt for a business lease (a business contract hire agreement) or a personal lease (a personal contract hire agreement)?
Founder and CEO of Synergy Car Leasing, Paul Parkinson, highlights the considerations to be taken when finalising your next vehicle leasing agreement.
Established in 2006, Synergy Car Leasing has seen a marked increase in personal contract hire agreements over the last fourteen years, however, the agreement chosen often depends on individual circumstances.
“Our Account Managers are trained to understand the needs of our customers and help them make an informed decision that’s the most efficient for their business and for the needs of the individual driver by providing all the relevant benefit-in-kind tax information as well as the P11D value of the car,” states Parkinson.
For business contract hire agreements, most businesses will be able to claim back 50% of the VAT on the monthly vehicle rental costs, however the driver of the vehicle will have to pay company car tax (Benefit-in-kind tax or “BIK”) if they also use the vehicle for private use.
“Benefit-in-kind tax is calculated on a variety of factors, including the CO2 emissions of the vehicle and the value of the vehicle,” explains Parkinson.
“For many businesses, keeping the BIK tax to a minimum is important for their company car drivers. However, this year, the government is advancing its green agenda, and fully electric vehicles have 0% BIK for the tax year 20-21, 1% BIK for tax year 21-22 and 2% BIK for tax year 22-23. Our team are now supplying a range of electric vehicles into a variety of businesses across the country, as owner-managers, directors and company car drivers look to take advantage of new technology and reduce their tax liability.
“Through Synergy’s carefully selected panel of funders, for those businesses looking to drive forward their own fleet, we can also help spread credit risk. We offer a Fleet Management portal to manage fleets and driver safety, as well as an Accident Management service to reduce time off the road and keep drivers mobile.”
Parkinson continues: “We have also seen an increase in businesses offering car allowances to their staff, for those that want to ensure a safe driving experience and a company perk which allows their people to drive the car they want to drive, at a cost which is acceptable to them without the business having to administrate and manage a fleet.”
With a personal leasing agreement there is no BIK to worry about, and many private individuals or opt-out company car drivers can continue their company car experience by opting to include a maintenance agreement with the lease or even a fully insured and maintained vehicle. In addition, all vehicles come with the manufacturers’ warranty, free contactless UK mainland delivery and road tax included.
“A maintenance and service agreement ensures there are no unexpected bills to pay, and it can all be organised through one phone call, and many of our client opt for their vehicle to be collected and then returned to them during the working day at their own convenience,” explains Parkinson.
Parkinson concludes: “Our Feefo Platinum Service Award recognises that we tailor our recommendations to the individual.”
For a no-obligation quotation or a free review of your current fleet or leasing arrangement, or to simply find out more visit www.synergycarleasing.co.uk
Call Synergy’s friendly team on 0330 134 5998, seven days a week – Monday to Friday 7am to 9pm and Saturday to Sunday 10am – 8pm.