Contract Hire / Personal Contract Hire

Contract Hire is ideal for companies and private individuals who don't want the financial risk of running their own vehicles. You hire a vehicle for an agreed period at a fixed monthly cost, the contract hire company retains ownership of the vehicle and at the end of the contract the vehicle is simply returned. The contract hire company take all the risks involved from interest rates to residual values, even the maintenance costs if the optional maintenance package is taken. In addition to the maintenance package you can include a full Breakdown and Recovery Service which includes home start and relay, and Relief Vehicles for use in the event of an accident or mechanical breakdown.

Key Benefits of Contract Hire

Off balance sheet funding

Vehicles on contract hire do not appear on your company?s balance sheet, the removal of capital assets from your balance sheet can enhance a company?s borrowing (gearing) ratio.

Vat Benefits

The VAT on the purchase price of the vehicle can be claimed back by the contract hire company, they pass these savings onto you in the form of lower monthly rentals. Once the vehicle is on the road you can claim back 50% of the VAT on the finance element (if the vehicle is available for personal use or 100% if only available for business use) and 100% of the VAT on the maintenance element of the rental payments.

Fixed monthly budgeting

Monthly repayments are fixed throughout the contract with initial deposits typically the equivalent of three months repayments, making budgeting much easier which in turn can improve your company?s cash flow.

Reduced financial risk and administration

Contract Hire removes the risks involved in running a company vehicle, from residual values.

Key Disadvantages of Contract Hire

• Excess mileage charges apply if you over the contracted agreed mileage.

• No option for ownership

• The vehicle has to be returned in good condition. Damage beyond acceptable fair wear and tear is chargeable by the leasing company at the end of the contract.