Business Finance

Business Hire Purchase

Hire purchase is an agreement whereby vehicles are purchased by Toyota Finance on behalf of the customer and hired for an agreed term. At the end of the contract period, ownership transfers to the customer on the payment of a nominal sum.

For business and taxation purposes, vehicles acquired under a Hire Purchase arrangement are treated as fixed assets of the company with the amount being treated as a liability.

A Business can offset the interest element of the Hire Purchase cost against Tax thereby reducing the effective cost of borrowing. The VAT amount on the vehicle can be claimed back from Revenue in one upfront payment at the beginning of the agreement (subject to vehicle qualification rebate). Vat is not normally recoverable on cars.

With Hire Purchase you can defer part of the capital cost until the end of the agreement and pay a final "balloon" payment, thus making the monthly instalment more affordable.

Benefits of Consumer Hire Purchase:

  • The product is straightforward with no tax implications on completion of the agreement
  • Fixed instalments provide for more accurate budgeting and forecasting
  • By funding vehicles by way of separate line of credit, working capital is free to be used where it is needed most - in the business
  • As well as preserving valuable working capital, HP can provide better cash-flow management and control.

Business Vehicle Leasing

For many businesses Vehicle Leasing is a very attractive and cost effective way of keeping the entire sales fleet and delivery vehicles updated and on the move.

Leasing can be used in a variety of situations whether it is for that new executive car, the entire fleet or delivery vehicles that need to be replaced.

There are two options for your business here:

  • Business Vehicle Lease Plan (Finance Lease)
  • Business Lease Fixed Term Contract Hire (Operating Lease)

Business Vehicle Lease Plan

Lease rentals are liable for VAT at the current standard rate, however the VAT element of the rental, in some circumstances, may be reclaimed by those customers who are fully VAT registered (applies to commercial vehicles and specifically excludes cars). Fixed rental payments are a feature of this type of leasing which makes budgeting of transport needs much simpler.

This method of leasing allows for flexibility at the end of the lease, the agreement can be extended beyond the original term (by paying a small annual rental) or the asset can be disposed of, thereby obtaining the value of the equity in the vehicle.

Benefits of Business Vehicle Lease Plan:

  • Immediate use of new vehicle with minimum cash outlay
  • Cash resources and bank credit lines are preserved thus maintaining liquidity
  • The term of lease can be matched to the economic life of the vehicle - 3 to 5 years
  • A professional sales image is reflected with a modern and up to date fleet.

Business Fixed Term Contract Hire

An Operating Lease / Contract Hire is similar to a Finance Lease. However, it includes an agreement agreed at the outset whereby the vehicle is returned to the supplying Toyota Dealer on completion of the lease term. The rentals payable by a business during the term of the lease, are usually lower than those payable under a Finance Lease, because the value of the vehicle at the end of the term is taken into account. Similar to a Finance Lease, the rentals payable are of course allowable against tax (subject to current legislation). Operating Lease / Contract Hire is suitable for most vehicles including cars, delivery vans, trucks etc.

Benefits of Fixed Term Contract Hire:

  • Fixed rentals allow accurate budgeting and forecasting and are a protection against interest rate fluctuations
  • Lease rentals are deductible for tax purposes (subject to current legislation)
  • Vehicle maintenance can be included in the Lease Contract, thereby greatly simplifying budgeting and fleet running costs.

At the end of the agreement:

  • Return the vehicle to your supplying Toyota dealer in good condition and within the agreed mileage.
  • …and you may then wish to choose your new Toyota and sign a new Contract Hire Agreement with your Toyota dealer for an agreed term and rental.

What type of vehicles can be leased?

All Toyota vehicles, including Cars and all Commercials can be leased.

If only everything was this easy

For more information contact your local Toyota dealer or Toyota Finance on 1850 67 68 69.

Warning: You will not own these goods until the final payment is made.

Lending criteria and terms and conditions apply. The credit provider is Bank of Ireland Finance. Bank of Ireland Finance is a registered trading name of Bank of Ireland. Bank of Ireland is regulated by the Financial Regulator. Full details available from your local Toyota dealer.