Selected all your options? Now click here >>
Quick contact

What Is Business Contract Hire And Leasing?

Business contract hire and leasing is a long-term vehicle leasing solution which is suitable for limited companies, partnerships, and sole traders. It is a very popular option for many businesses, especially if they are VAT registered, as they can claim 50% of the VAT back for the supply of the vehicle.

 

How could business contract hire work for your business?

Taking advantage of one of our business contract hire deals means you are free to concentrate on the core activities of your business without the administrative burden or financial risk associated with owning your own fleet.

When your business leases a car on a contract hire basis, you pay to rent the vehicle in monthly installments. Once the contract period ends, you return the vehicle to the leasing provider, meaning they are the ones who have to worry about depreciation and disposal.

 

What are the key features of business contract hire and leasing?

  • The leasing company remains the owner of the vehicle which means it does not appear on the balance sheet of your company.
 
  • Your fixed monthly rental cost will cover the cost of renting the vehicle plus any maintenance costs.
  • The monthly rental cost will take into account vehicle cost, contract period, estimated residual value of vehicle, mileage allowance and any maintenance costs you choose.
 
  • Your vehicle tax will be included for the full term of the business contract.

Important things to take into account

  • If you decide to terminate the contract early it could be very expensive.
  • If you go over your agreed mileage you will have to pay an excess mileage charge (which is normally calculated on a pence per mile basis).
  • You need to keep on top of maintenance as the car should be in tip top condition when you return it otherwise you will be charged for repairs.
  • You are still responsible for insuring the vehicle.
  • You won’t actually own the vehicle and there won’t be an option to buy it either.

What happens at the end of the business contract?

As we mentioned above, at the end of the contract term you should return the vehicle to the leasing provider, which will leave you free to enter into another lease without any financial obligations. If you have exceeded your mileage installments then you should expect to pay an excess mileage charge. Your vehicle will also be assessed according to the BVRLA Fair Wear and Tear guidelines and any damage that falls outside of these guidelines may make you subject to penalty charges.

If your business is looking for business car hire UK deals then take a look at our deals online, or call our team of specialists on 01625 704396 to discuss the options available to you.

 

Share this article Post this page to facebookTweet this pageGoogle+ this pagePost this page to LinkedinPin page

Posted on 9th May 2019 at 4:31 PM

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website. However, if you would like to, you can change your cookie settings at any time. Close this message.