Accounting Issues

Q. Are the rental payments fixed for seven years? A. Yes, the rental price is set for seven years. Changes in the rate of VAT are the only things that can affect the monthly rental.	Q. Does the fixed amount mean I can predict my overhead? A. Yes, the rental is in effect a fixed overhead. No contingency plans need to be made for extra maintenance, repair staff or breakdowns, as the rental covers all this during the rental period.
Q. Is renting more tax efficient than buying? A. Yes, ask your accountant to explain this one. But it is related to what is allowable against the profit of the company when looking at the corporation tax computation.	Q. How will this affect my cashflow? A. Dramatically. If you buy you are tying up thousands of pounds in something that might only be used occasionally. The set can be rented for a fraction of the cash outlay compared to the purchase price, and all worries of breakdown and spiralling maintenance costs are gone.

Frequently Asked Questions

Q. Why is the standard rental period for 7 years?

A. Our research shows us that this is about average time for customers to consider upgrading the set to meet their increasing backup power needs. Previously when they bought, they felt tied to their purchase, not wishing to scrap a seven year old set just because their power needs had increased slightly.

Q. So did they buy a set bigger than they needed?

A. In many cases yes, they bought a bigger set than they required, so it would be able to cope with the power they guessed they would need in the future. But renting means they just specify what they need in the shorter term, reducing their cost.

Q. What are the extra costs not included in the monthly rental?

A. Rental provides a backup power solution that takes care of all maintenance and breakdowns. The customer does have to pay for fuel, insurance of the set and any accidental damage caused to the installation.

Q. What happens after 7 years?

A. Customers have three options, continue renting the same set, have the set removed, or change the set for a new one to your latest backup power requirements.

Q. So who looks after the generator?

A. We organise all the maintenance and repairwork to the equipment we have installed. So you need no extra staff to look after your backup power equipment. We do expect the customer to complete certain regular checks themselves, as you should with oil levels and tyre pressures on a contract hire car for example.

Q. Does renting mean the customer has to have a standard set?

A. No. We can still create a custom installation, to the customers specification, in terms of installation, silencing etc. The only thing that causes us a problem is building the generator room round the set. This problem can be solved if the Air Inlet or Extract is large enough to allow the set to be removed through the opening. If the set is not removable the rental can continue for a further period or can be purchased at a reduced cost.