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Contract Hire...
is the leasing of a vehicle, normally to a vat registered business or company, for a set time and mileage at a fixed monthly rental. The monthly rental is determined by the cost of the vehicle, the period and mileage covered as well as the resultant depreciation. Maintenance packages are often included within Contract Hire agreements, but are not obligatory.
Contract Hire benefits...
There are many benefits of contract hire, some of these advantages are listed below:
- Contract hire offers fixed-cost motoring.
- VAT can be reclaimed on 50% of total payments made and 100% on the maintenance package costs.
- Hire Rental Tax Allowances can be applied when opting for contract hire.
- Residual value is no longer a risk that you face.
- There is no large initial outlay as the costs will be evenly spread out in monthly payments.
- Cars / Vans can be changed on a regular basis - allowing fleets to run the latest vehicles.
Personal Contract Hire...
as its name suggests, is essentially the same as Contract Hire but for private individuals. If you want fixed cost motoring, or have opted out of a company car scheme then Personal Contract Hire could provide you with hassle free motoring without the residual value risks associated with traditional ownership.
VAT is built into the monthly payments, but is not reclaimable by private individuals. Maintenance packages are usually available so that you don't get any nasty surprises.
Personal Contract Hire Benefits...
Amongst the benefits of Personal Contract Hire are:
- Being able to hire both new and used vehicles at fixed prices.
- Road Fund Licence included in lease agreement.
- Full maintenance packages can be included.
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