Contract Hire

Services included in Contract Hire:

• Free sourcing and delivery of your vehicles.
• Road Fund Licence for the duration of the contract.
• Free collection of your vehicle at the end of the contract.

Additional services which can be included:

• All routine servicing, mechanical repairs, batteries, exhausts and tyre replacement
• Replacement vehicle provided in the event of an accident or mechanical breakdown.
• Full membership of a motoring programme including Home Start, Road Side Assistance, Relay, Relay Plus and European Cover.
• Motor insurance, individual or fleet cover available.
• GAP insurance up to a maximum of £5,000.

Your only responsibilities:

• Choosing the vehicle.
• Choosing the service options.
• Paying for fuel, oil and insurance.

The Benefits:

• Costs paid from income not capital.
• Fixed monthly rental for accurate budgeting and cash flow.
• Minimum initial expenditure, typically three months in advance.
• No capital tied up in a depreciating asset and no residual value risks on your vehicles (depreciation being the largest single cost).
• Routine servicing and maintenance costs can be covered.
• No purchasing or disposal hassles, providing constant mobility.
• The leasing company is able to reclaim all the VAT on the purchase price of the vehicle which is reflected in much lower monthly rentals to you, the customer.
• For new cars and VAT qualifying used cars, assuming some personal use, the current legislation allows you to reclaim 50% of the VAT on your monthly rental against your VAT liability. The other 50% can be offset against taxable profits.
• For non VAT qualifying cars and commercial vehicles current legislation allows you to reclaim 100% of the VAT, and offset 100% of the monthly rental against tax.
• Rentals allowable against tax.
• Costs 'off balance sheet' improving gearing ratios and return on assets.

Disadvantages:

• As a fixed contract, it is designed to run for a specific period of time and can therefore carry some penalty if terminated early.