31 July 2008
Lombard has put together a bespoke finance package for LA Fitness, one of the UK’s leading health club chains, which provides a fleet solution and enhances the earnings performance of the business.
LA Fitness, which also funds its gym equipment through Lombard asset finance, wanted an alternative to contract hire but with the convenience associated with that type of arrangement. Initially they considered a finance lease for their fleet of around 50 cars but Lombard proposed contract purchase, as a finance lease cannot be provided with a maintenance contract, and contract purchase also reduces end-of-life risk.
"The team at Lombard has worked with us to ensure that we have the best solution for our specific situation," says LA Fitness Commercial Director Andy Webb. "They have been both consultative and flexible, meeting our fiscal requirements, creating a bespoke hire schedule and adding a service and maintenance package to the funding product to give us the level of outsourced support we wanted." The deal was handled by Lombard Vehicle Management Business Development Manager Stuart Moore.
Unlike contract hire, with contract purchase the vehicle can be accounted for on the balance sheet and the customer has the option to buy it at the end of the contract. Up to that point, if an SMR facility is specified contract purchase provides all the operational and administrative benefits of an operating lease together with the tax benefits of ownership. VAT is not recoverable on the purchase price or monthly payments, but no VAT is chargeable on the finance element. And as the vehicle is on-balance-sheet for the duration of the contract, allowances can be claimed on the reducing asset value.
The LA Fitness fleet will consist predominantly of BMW 3 Series and VW Golf variants, plus an open choice for directors. Deliveries started in mid-July.
LA Fitness is based in Doncaster. Over a quarter of a million people are members of its 88 clubs across the UK.
ends...
For further information please contact Mark Carbery, The Longshore Consultancy:
T: 01832 272197
M: 07968 317962
E: mark.carbery@longshoreconsultancy.com
EDITORIAL NOTES
Lombard Background:
- Lombard is the UK's largest asset finance company and part of The Royal Bank of Scotland Group. Its specialised vehicle management business is one of the largest in the UK, managing a fleet of over 115,000 cars and light commercial vehicles of virtually every make and model
- Based in Birmingham, Lombard Vehicle Management has a specialist team of over 420 people supporting a 5,000-strong customer base including major businesses such as The AA, British Gas and IKEA
- The company was ranked fourth in the 2007 FN50 league table of fleet leasing providers
- Awards: Fleet Management Service Award, Van Fleet World Honours 2008
Best Business Motor Finance Provider, Business Moneyfacts
Awards 2008
Best Motor Vehicle Finance Provider, NACFB Awards 2007 - Visit Lombard Vehicle Management's website
