Contract Hire UK

Contract Hire

If you are a VAT registered business that want a way of paying for a company car that is both tax efficient and comes with minimum administration then Contract Hire may well be the answer.

Contract Hire is essentially a long term hire of a car. You are renting a vehicle for a set period of time with a set mileage. You pay a monthly rental and most of the costs of running the car are included. Depending on your annual mileage you can may want to include an all inclusive maintenance package.

The leasing company can claim back the VAT on the purchase price of the vehicle and this saving is passed on. Part of the VAT on the monthly rental can be claimed back as well. As well as contract hire for cars you can get contract hire for vans.

You will be able to obtain a quotation on any make or model and in some circumstances a used vehicle contract hire quote can be requested. Once you have picked your car or cars you will need to choose your annual mileage and the length of time of the contract. A contract hire agreement is normally three years in length but a contract hire quote can be for 12, 24, 36 or 48 months.

Once you have agreed the terms of the quotation for your car or van with the leasing company they will order the vehicle on your behalf using their enhanced purchasing muscle. The order will be traced and delivery arranged. The contract has to signed and initial payment made prior to taking delivery.

At the end of the contract hire period, you just hand back the vehicle or extend the hire for a further period. If you have exceeded the agreed mileage a charge will be made and the vehicle is expected to be returned in good condition.