Short Term Leasing brings pain relief to the headache of sourcing new vehicles for new staff
8th March 2013
personal car leasing
Personal Car Leasing Explained
13th January 2014

It’s a familiar story – a new employee is about to start or you realise a colleague needs a new car for his promotion and it all has to happen now.
iStock_000019969374SmallAlthough a successful business, adept at handling situations that come your way every day, what generally happens next is closer to business financial carnage or at the very least a momentary lapse of common sense; you panic and quickly hire a short-term car, breath deep and then forget about that long-term contract hire car for three or four months time. But here’s the sin; at no time did you pay close enough attention to working a short-term hire into a long-term contract hire strategy. You made an immediate decision that the two parts have no connection with one another at all.


Let’s paint a different picture – one where seamless transition between the immediate and urgent decision, and the future vehicle needs are approached with the benefit of company finances, driver needs and longevity at the core. A calm and considered approach where a three month car hire is arranged and then integrated alongside your chosen vehicle partner – the right long-term contract is arranged for the benefit of all.

Making rash decisions and rushing into the short-term lease (@90 days) can be costly [you can replace this with unnecessary expense if you wish]. Often companies forget about the agreed time period and let things run on which can lead to contracts extending and added financial implications.

Close relationships

By forging a one-on-one relationship with your leasing specialist you will be seamlessly led on your contract hire journey from short-term hire to long-term contract, and at all times ensuring you get the right vehicle for your organisation and driver.

When urgency and panic are prevalent then poor decisions are made. Not enough attention is given to what the real cost of the vehicle is over it’s contract lifespan. Factors such as taxation and miles per gallon are frequently ignored when decisions are made; focusing instead on purely the single monthly cost.

Here’s an example:

Two different cars are highlighted below. Both based on 36-month agreement, 20,000 miles per year and CO2 Emissions based on 20%

P11d Value

Annual fuel cost

Monthly rental

Driver Tax

Company Ni Tax












It shows the rental figure is not “King” as the Driver has to pay benefit in kind tax of either 20 or 40 % and Company has to pay NIC (13.8%). With this added into the mix the monthly rental differences in the two cars are negligible yet the costs to the driver and the company are higher on one versus the other.

If all that is considered is the monthly outlay then across the term of the contract you’ve made a poor judgement. This approach will only make its mark if you form a close relationship, from the very beginning of your vehicle hire/leasing needs, with a provider – one who will walk you through the journey from the beginning to the end.


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