Business Contract Hire
What is Contract Hire?
The most common form of leasing agreement in the United Kingdom. It is also known as an operating lease.
- Fixed long-term rental agreement.
- Fixed mileage (can be adjusted if required)
- You only pay for the use of the vehicle
- At the end of your contract you simply hand it back.
- Improves cash flow.
- Low initial payment.
- Flexible payment profiles.
- Fixed cost motoring.
- Eliminates financial risk associated with disposing of the vehicle.
- Full maintenance packages available.
- Fleet discounts available.
- Reclaim 50% of VAT on finance element.
- Reclaim 100% of VAT on maintenance element.
- Early termination can be expensive
- You must look after the vehicle and return it in a well maintained condition.
- You must have fully comprehensive car insurance and cannot have third party insurance as the car is not yours.
- You will never own the vehicle
- There is no option to buy the vehicle
More information on Contract Hire
Contract Hire is the most common form of car leasing. Many people chose Contract Hire because it allows you to drive the car of your choice, whilst paying a relatively low initial payment.
The low initial rental payment makes it easier for customers to obtain a car quickly. At Central, we endeavour to provide customers with the earliest possible delivery date and we also ensure that customers are kept up-to-date with the progress of their orders.
When the contract comes to an end, you will not have to think about car depreciation or the disposal of the vehicle, since you simply return it and take a new contract.
Depreciation forms one of the largest unseen motoring costs. Contract Hire takes away the worry of depreciation and is not just available to businesses; Personal Contract Hire is very easy to manage and is extremely cost effective!
Contract Hire is very flexible which makes it attractive for every budget. We will help you to find the perfect payment plan to suit your circumstances. Adjustment to monthly payments becomes possible if the duration of the contract is lengthened or a larger initial rental payment is made up front. Generally, the total amount you pay during your contract is the same, so it’s in your hands as to how it is distributed.
When entering into a Contract Hire Agreement, you will set your own annual mileage limit. This means that at the point we produce a quotation for you, you will be asked how many miles you think you will do in a 12 month period. All Contract Hire Agreements have a set excess mileage charge for all miles undertaken beyond the agreed limit.
You can normally select any mileage from 10,000 to 40,000 per annum.. Setting the annual mileage in this way enables the finance company to calculate the monthly rental. If you find that you have underestimated the mileage, your contract can be adjusted but you will have to pay slightly more each month or once the contract has come to an end you will pay the excess mileage charge, agreed at the beginning of your contract. This is usually only a few pence per mile.
For customers wishing to tie up all their motoring costs in one payment, it is possible to include a maintenance contract with your finance agreement for your vehicle. This means that you pay a monthly charge for maintenance, which generally includes your servicing, routine maintenance, tyres, exhausts and battery costs.
Business Contract Hire is not too dissimilar from Personal Contract Hire however there are many benefits of taking a Contract Hire agreement through your business which you may not be aware of. Did you know that you can re-claim 50% of the VAT payable on the finance element of your payment and 100% of the VAT on your maintenance element, should you chose to include this in your contract?
Contract Hire is also useful for companies who would like to lease a fleet of cars. If you are looking to lease a fleet, (usually this would cover customers looking to take more than one vehicle), discounts may be available and a member of our friendly sales team with be happy to discuss this with you in more detail.