Explain The Following Terms When Applied Force Vehicle Fleet Contracting?

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1. Explain the following terms when applied to vehicle fleet contracting?
a) Rental.
Rental refers to procurement of a vehicle to cover a period of no more than 28 days. If renting vehicles for short periods of time, specific legal implications apply to the company or driver renting the vehicle:
• Where gross vehicle weight exceeds 3.5 tonnes, the operator
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Which includes the maintenance and safe road going condition of the vehicle.
• Vehicle with driver.
If the vehicle is supplied with the driver, the hire company is the employer of the driver, so are the ‘User’ of the vehicle. In law they are therefore legal responsible for the vehicle, with regards maintenance and safe road going condition.
c) Leasing.
Leasing refers to a vehicle procured for a fixed length of time. The operator never owns the vehicle outright, but has full use of the vehicle, as if he was the owner. The vehicle is purchase by a finance house to the requirement of the operator. They may have no involvement in the transport industry, so don’t need to have an ‘O’ licenses to operate the vehicles that are purchased. A mutually agreed contract is written up with the terms and conditions of the leasing.
There are different types of finance arrangements used for the leasing of fleet vehicles.
• Full Amortization leasing.

These run for a fixed period, primarily agreed. When this time is finished a secondary period can be agreed apon, if the operator still is in need of the vehicles.

• Balloon deal leasing.

This is the most common leasing arrangement, they give the operator the option to pay a large payment at the end of the agreement to settle the outstanding balance where the operator then is the owner of the vehicles, or a large payment maybe made at the beginning to start the lease agreement.

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