Contract Hire is the most common form of operating lease in motor finance, particularly in the provision of vehicle fleets.
Facilities to fund a single vehicle or fleets of vehicles for business customers.
Off balance sheet funding as the vehicles are owned by the Finance company.
Fixed monthly cost for the life of the agreement.
Terms can be tailored to meet specific requirements over mileage and funding period.
Can include all the maintenance costs or just the finance element.
Road fund licence costs are included.
VAT is paid on the rentals and these can be recovered in full for a commercial vehicle and 50% for a car.
Assists cashflow and budgeting by spreading the cost of vehicle ownership over the useful life of the vehicle.
A minimal deposit is paid, typically only 3 rentals.
A customer can benefit from the purchasing power of the Finance company with vehicle prices significantly discounted along with associated maintenance costs.
Rentals are offset against taxable profits which could reduce your tax liability.
No potential to lose money on disposal at the end of the contract as this is at the Finance company’s risk.
Fleet management capability assists companies when running fleets of vehicles.