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What is Contract Hire?
Contract Hire is the long-term provision of a vehicle for a fixed monthly rental. When the contract is drawn up, the customer can specify their desired term of hire and give an approximation of their annual mileage to help determine this monthly cost.
For the duration of the contract, the vehicle remains the property of the leasing company leaving the customer free of the operational and financial risks that can result from car ownership.
Contract Hire packages often include the option to pay a fixed amount to include vehicle maintenance. This would usually cover the customer for the cost of scheduled servicing, repairs, batteries and exhausts, and a maintenance management programme.
Advantages of Contract Hire
The customer has all the benefits of use but none of the disadvantages of vehicle ownership. The administrative burden of updating company car records and organising maintenance is lifted from the customer. Leasing companies already have the contacts and infrastructure in place (as well as access to the best discounts) and therefore have the ability to handle any requirements with the greatest speed and success in the most cost-effective way.
Finally, and perhaps most importantly, the tax structure in the UK favours Contact Hire as a purchasing method for businesses so it can often be the cheapest way to fund company cars.
What is Personal Contract Hire?
Personal Contract Hire is essentially the same as regular Contract Hire, but it applies exclusively to private individuals. You take control of a car for a contractual period - usually referred to as the 'lease period'. Though the car is in your possession, it is not actually yours to own. Instead, you make fixed monthly payments to a leasing company for the duration of the contract - and when the contract expires, you simply return the car to the leasing company or take out a new personal contract hire lease. As a result you never have to worry about resale values of the car - because you can simply return it and walk away.
What are the advantages of Personal Contract Hire?
There are many advantages to Personal Contract Hire including:
- Fixed prices - You can hire both new and used cars at fixed prices and not have to worry about interest charges. This can help you budget.
- Cost effective - The monthly instalments for a Personal Contract Hire agreement will generally be lower than those of a personal loan.
- Road Fund Licence - Will be included in the agreement for the term of the rental.
- Maintenance packages - Most Personal Contract Hire deals will include maintenance packages so you don't have to worry about general upkeep of the vehicle.
- No depreciation concerns - You don't have to sell the car at the end of the term so you don't have to worry about its depreciation.
Of course with still offer the traditional ways to finance your next vehicle including Hire Purchase, Personal Contract Purchase and other methods of funding to suit your individuals needs and requirements.
To request your own bespoke finance quotation, please complete the form below which will be submitted to our Online Business Manager who will contact you shortly for additional information.