What is Leasing
Contract hire is a type of leasing agreement. Conceptually it’s like renting a vehicle, but instead of for a day, a month or a weekend it’s normally for a pre-fixed longer period such as 2,3,4 or 5 years.
It is also for a fixed mileage amount.
Why Contract Hire could suit you:
- Low monthly payments – you only pay for depreciation and interest rather than the full cost of the vehicle and interest.
- Fixed Payments – makes budgeting easier as you know your cost for the period of the contract.
- Risk Free – The risks associated with ownership are eliminated especially when maintenance is included.
- Flexible – contracts can be for 2 years to 5 years and mileages from 5,000 per year to a total contract mileage of 180,000 miles
- Less Hassle – you simply return the vehicle at the end. No having to sell the vehicle or haggle over a part exchange price.
- Fixed Cost Maintenance – comprehensive maintenance cover can be included, smoothing the cost of maintenance and repairs over the contract period and providing total peace of mind against unexpected bills. Opting for maintenance cover also stops you having to haggle with garages over service and repair costs and whether repairs should be done under warranty or not.
- VAT – 50% of the VAT on the finance portion of the rental can be reclaimed by VAT registered businesses and 100% of the VAT on the maintenance portion of the rental