Contract Hire
Contract Hire is a method of funding the use but not the ownership of a vehicle. The vehicle is loaned to you for an agreed period (Primary Period of Hire, usually 36 or 48 months) for a fixed monthly sum and at the end of the contract you hand the vehicle back.
This type of agreement transfers substantially all the risks associated with ownership to the Lender. You are not responsible for selling the vehicle at the end of the contract, subject to the vehicle being kept in good condition and not exceeding the agreed mileage. Service and maintenance plans can be included with Contract Hire agreements to cater for fixed cost motoring.
In order for us to provide the best monthly price the vehicle must be VAT qualifying. This covers all new vehicles and certain second-hand vehicles depending on the previous keeper's circumstances.
Contrary to popular belief, Contract Hire is no more expensive than a similar purchase agreement which has a final balloon payment included, and after the tax advantages have been taken into account, it can be considerably cheaper. So all things being equal, you are better off using Contract Hire as the route to funding your next vehicle.
Flexi-LeaseAll Contract Hire agreements now provide the facility to upgrade and start a new agreement with us without early termination charges after two years (terms apply).
In summary these are the benefits of Contract Hire:
- Use of the vehicle for the duration of the agreement without responsibility for disposal at the end.
- Fixed motoring costs - if maintenance package included.
- Tax implications that can make Contract Hire a far more cost effective alternative to other funding options.
- Change your car every two years without early termination charges (terms apply).
| |
