UNDERSTANDING BUSINESS CONTRACT HIRE
Contract Hire is the leasing of a vehicle for a fixed period of time and at a fixed monthly rental. The choices of vehicle and contract terms are flexible to meet your individual needs and requirements.
The low cost attributed to contract hire is because the financial lender is able to reclaim the VAT on the new car and pass the savings onto the hirer in the form of low monthly rentals.
The main benefits of Contract Hire are:
- Flexible rental pattern
- Fixed monthly costs which can include maintenance
- More capital available for your core business
- Off-balance sheet borrowing
- No risk of depreciation
- No disposal problems of the vehicle
- VAT on rentals reclaimable if Maintenance included.
- Administration and Management is transferred to supplier
- Contract Hire enables companies to release cash normally tied up in outright purchase and allows them to opt for a low deposit followed by fixed all-inclusive monthly rental.
- Contract Hire has a market share of 40% and is still rising.
- The leasing company calculates a residual value for a vehicle at a set age and mileage contract and charges the user a monthly fee to cover the depreciation over that period plus a funding charge along with add-on services such as maintenance and gap insurance.
- At the end of the duration of the contract, the vehicle is sent back to the provider with no further obligation to either party, subject to terms and conditions.
If you would like more assistance or would like to discuss any financing options available to you please call any member of our team on 01472 358 625.