What can I expect from contract hire?
Contract hire is by far the most popular means of leasing a car when it comes to corporate vehicles. Easy to manage monthly payments mean that you can stagger the cost of your company cars and finance your business' vehicle needs without needing to account for large outgoings.
During a contract hire agreement the lessee pays monthly instalments towards the use of their car. This is over an agreed time span and an agreed mileage and this cost takes into account a number of considerations. Your leasing agent will calculate the period over which you plan to use the car, the mileage that the vehicle can expect to cover and the overall depreciation in value of the automobile.
If you are a business owner looking for a fleet of executive vehicles but aren't sure about how to finance your new cars, a contract hire plan could be ideal. Not only can you accommodate lower payments into your monthly budget, but you can also reclaim VAT on certain areas of the contract hire. Over half of all contract hire plans for new cars are for executive vehicles leased by companies.
Usually, you will be required to pay for three months' worth of instalments in your initial deposit and after that you will pay the same fee each month. Risks of vehicle ownership such as maintenance costs, ongoing depreciation and the selling on process are all removed from the equation by this convenient car leasing solution. You can also remove your contract hire car from your balance sheet as it isn't counted as an asset. Throughout the contract hire lease the leasing firm retains ownership of the vehicle and it is returned once the contract reaches its agreed expiry. In not needing to dispose of your vehicle you can swap for a newer model without any complications.