Funding Options

Which funding options suits you?

With all the leasing options available, we understand how confusing and time-consuming it can be for you when trying to get to grips with the information needed to select the best for your circumstances.

To ensure you get the right one, when agreeing your contract GKL will take time to thoroughly understand your requirements, recommend the one that is best for you and give you a detailed explanation of the method before you put pen to paper.

So what are the options available to you?

Contract hire is the most popular. It frees up your working capital and allows you to budget easily, with fixed monthly rentals based on cost, lease term and annual mileage. There are no up-front costs or depreciation losses and, as no VAT is paid on the vehicles, there can be tax advantages which are reflected in your monthly rental fee. You can choose from a wide range of new vehicles so you don’t need to worry about MoTs, and breakdown cover and servicing are included unless otherwise agreed. And importantly, you will also benefit from GKL’s vast fleet management expertise.

All you are responsible for is comprehensive insurance cover, filling up with fuel, maintaining the car in good condition, checking and topping up oil, and enjoying hassle-free motoring in your brand new leased vehicle.

At the end of the lease we take responsibility for disposing of the vehicle (unless you want to buy it!) and supply you with a new car or van of your choice.

Contract purchase (also known as lease purchase) is similar to contract hire, but in this case you will own the vehicle at the end of the lease term. The monthly payments are slightly higher with this option or there will be a deposit or final ‘balloon’ payment before you take ownership.

Hire purchase is a suitable option if you prefer to own your vehicles and show them as assets on the balance sheet. In this case, you will be responsible for maintenance and running costs.

Purchase and leaseback, where GKL buy your fleet and lease your vehicles back to you under the terms outlined above, could be suitable if you already own a number of vehicles and would like to benefit from the advantages of contract hire.

The Employment Car Ownership Scheme (ECOS) allows you to retain control of your fleet policy although the employee ‘owns’ the car. Your employees benefit from vehicle and maintenance repayments funded through a combination of tax savings, tax-free business mileage reimbursement and top-up cash allowances. If the employee leaves your company, the value of the car must be reimbursed to you. At the time of writing, there is uncertainty about whether the Chancellor of the Exchequer will allow ECOS to continue in a way that is advantageous to the driver: GKL will continue to monitor the situation and give you advice at the time of any enquiry.

Personal Contract Hire (PCH) is designed for employees who enjoy the benefits of a company car but who opt to pay for it personally, thus removing liability for ‘benefit in kind’ taxation. The driver pays a fixed monthly rental charge based on cost, lease term and annual mileage, and returns the car at the end of the term. The monthly payment includes breakdown cover and can include maintenance. Any make of car or light van can be supplied. PCH gives your drivers an easy and economical way to afford a new car without the hassle of selling it or trading it in at the end of the term.

Personal Contract Purchase (PCP) is similar to personal contract hire, with a flexible deposit and affordable monthly payments, but with the option to purchase the vehicle at the end of the term. A Guaranteed Minimum Future Value (GMFV), also known as a ‘balloon payment’, is agreed at the start of the term and, at the end of the contract, your driver can either return the vehicle; pay the GMFV and keep the vehicle; or part exchange the vehicle, setting the GMFV against the deposit for a new car or van. If the vehicle is valued at more than the GMFV, the additional amount is put towards your deposit on the replacement. If the vehicle is valued at less than the GMFV the driver can return the car with nothing more to pay, since the future value was guaranteed at the start of the contract.