How does Business Contract Hire work?

Looking to kit out your fleet? Business Contract Hire is a cost-effective and easily manageable long-term business solution.

Reduce your financial and administrative burden with Business Contract Hire, a credit agreement between your business and the finance company. Leasing your fleet with Contract Hire lets you avoid worrying about depreciation values and vehicle administration. Instead, you simply pay fixed monthly payments for an agreed period of time (one to four years) and hand the vehicle back at the end of the agreement.

Contract Hire offers several advantages to your business. Leased vehicles don't need to be shown on your balance sheet and 50% of your VAT on the lease payments can be claimed back. The flexibility of the terms, costs, and mileage allow you and your business to quickly adapt to changing market conditions.

What are the benefits of Contract Hire?

Contract Hire is one of the most cost-effective ways to equip your business fleet with premium commercial vehicles including vans, trucks, pick-ups, and 4x4's. There are other benefits to Business Contract Hire leasing:

• You can equip your fleet with the latest technology for fuel efficiency, upgrade the size of your payload with larger vehicles, and get hands-on with in-car technologies such as Sat Nav, reversing cameras, and Apple CarPlay.
• Low initial payments, usually made up for three to six monthly payments.
• Monthly payments are fixed at the beginning of the contract based on the duration of the lease and the annual mileage you expect to perform. The value of the vehicle is estimated based on the annual mileage agreed and the monthly payments will be spread out to cover the depreciation costs for the duration of the agreement.
• Contract Hire removes unnecessary administrative costs from your business. You simply pay the monthly fees and hand the car back at the end of the lease.
• VAT registered businesses can reclaim 50% of the VAT on the contract and 100% of the VAT on any maintenance element.

Do your business qualify for Contract Hire leasing?

To be eligible for business contract hire leasing you must be an eligible sole trader, partnership, or limited company. Your company will have to provide proof of address and ID and be subject to credit checks before a decision can be made whether or not your organisation is eligible.

What happens at the end of the lease?

At the end of the Business Contract Hire agreement, you simply hand the vehicle back to the leasing provider with no further obligations on the vehicle. If you have exceeded the agreed annual mileage you will be liable to pay for each mile over the agreed total. The condition of the vehicle will be assessed according to the BVRLA (British Vehicle Rental and Leasing Association) Fair Wear and Tear guidelinesBVRLA (British Vehicle Rental and Leasing Association) Fair Wear and Tear guidelines. Any damage outside the BVRLA guides may be subject to end-of-lease penalty charges.

Contact one of our Chorley Group dealerships today to learn more about Personal Business Contract Hire and other finance options available.

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