Business Contract Hire offers fixed monthly costs without financial risk. The running cost of cars and light commercial vehicles is one of the biggest expenses most businesses face. Add to that the risk of depreciation, and it’s no wonder Business Contract Hire is such an appealing option. Whether a customer is running a single vehicle or a large fleet, contract hire enables them to control one of their biggest expenses.
Improved cash flow
No depreciation risks
Rentals allowable against taxable profit
Accurate monthly budgeting
Fixed interest rate
The funder reclaims the VAT on the original purchase of the vehicle, which reduces the customers rentals which are charged excluding VAT
Off Balance Sheet funding
50% of the VAT is reclaimable on the monthly payments (assuming an element of private mileage)
Where a vehicle is used solely for business, for example a pool car, 100% of the VAT is reclaimable
VAT on the maintenance element is reclaimed at 100%
The convenience of a full maintenance service, at a fixed monthly cost, is optional.
Road Fund Licence is provided for the full term of the contract.
The cost to early terminate the contract can be expensive.
If the customer goes over their agreed mileage allowance, excess mileage will be charged for each mile over that is stated in their contract.
The customer must have a fully comprehensive vehicle insurance.
The customer must look after the vehicles and return in a well maintained condition, if not they will be charged for any damage over and above as stated in the ‘Fair Wear and Tear Guide’.
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