Contract Hire

Contract Hire is a simple and effective way to fund any number of vans. Contracts range from 24 to 60 months and are tailored to your requirements with bespoke initial payments and contracted mileages available.
With small initial rentals and fixed monthly costs, Contract Hire makes budgeting simple.
You have no risk on the residual value at the end of the contract, simply hand the van back and start again. Maintenance and recovery can also be included within the agreement.
Contract Hire is a simple and cost-effective way to fund any number of vehicles, not suitable for businesses that want to want to own the vehicle or use them in a manner that will cause large amounts of damage.

Advantages

• With a fixed monthly cost, contract hire makes budgeting easy.
• Flexible initial payments mean small initial outlay.
• Low risk as it removes the uncertainty surrounding the future value.
• If you’re VAT registered you can claim back 50% of the finance element and 100% on the service element.
• Ability to run brand new vehicles, reducing potential issues and downtime.
• You must look after the vehicle and return it in a well maintained condition otherwise you will be charged for any damage over and above that stated in the ‘Fair Wear and Tear Guide’
• Reduced fleet administration.

Disadvantages

• The contract is for a fixed period; it can be expensive to terminate (usually 50% of the remaining rentals).
• There is no option for the company to own the vehicle.
• Based on a pre-determined annual mileage, going over mileage will mean you are charged an excess mileage charge. You are though able to change your contract should your circumstances change.
• You must look after the vehicle and return it in a well-maintained condition otherwise you will be charged for any damage over and above that stated in the ‘Fair Wear and Tear Guide’
• You must have fully comprehensive vehicle insurance (or third party and self-insure).

For more info on Fair Wear & Tear please see our guide