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Home > Contract Hire

Contract Hire

Services included in Contract Hire:
  • Free sourcing and delivery of your vehicles.

  • Road Fund Licence for the duration of the contract.

  • Free collection of your vehicle at the end of the contract.

Additional services which can be included:
  • All routine servicing, mechanical repairs, batteries, exhausts and tyre replacement

  • Replacement vehicle provided in the event of an accident or mechanical breakdown.

  • Full membership of a motoring programme including Home Start, Road Side Assistance, Relay, Relay Plus and European Cover.

  • Motor insurance, individual or fleet cover available.

  • GAP insurance up to a maximum of £5,000.

Your only responsibilities:
  • Choosing the vehicle.

  • Choosing the service options.

  • Paying for fuel, oil and insurance.

The Benefits:
  • Costs paid from income not capital.

  • Fixed monthly rental for accurate budgeting and cash flow.

  • Minimum initial expenditure, typically three months in advance.

  • No capital tied up in a depreciating asset and no residual value risks on your vehicles (depreciation being the largest single cost).

  • Routine servicing and maintenance costs can be covered.

  • No purchasing or disposal hassles, providing constant mobility.

  • The leasing company is able to reclaim all the VAT on the purchase price of the vehicle which is reflected in much lower monthly rentals to you, the customer.

  • For new cars and VAT qualifying used cars, assuming some personal use, the current legislation allows you to reclaim 50% of the VAT on your monthly rental against your VAT liability. The other 50% can be offset against taxable profits.

  • For non VAT qualifying cars and commercial vehicles current legislation allows you to reclaim 100% of the VAT, and offset 100% of the monthly rental against tax.

  • Rentals allowable against tax.

  • Costs ‘off balance sheet’ improving gearing ratios and return on assets.

Disadvantages:
  • As a fixed contract, it is designed to run for a specific period of time and can therefore carry some penalty if terminated early.

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