What is the appeal of Contract Hire?
Armed with its enticing benefits, it is no wonder Contract Hire is fast becoming a hot topic within the automotive industry AND an increasingly popular finance option! Simon Meredith, Business Development Manager of Chatsbrook, states that “Contract Hire represents an agreement between two parties to lease a vehicle (car or van) for a set time period (and mileage) at a fixed monthly cost. To explain it simply, Contract Hire operates in the same vein as your mobile phone contract- you pay a fixed amount every month for a set amount of time and at the end of the agreement you can look for another arrangement to enjoy the latest release.”
“Contract Hire (CH) has many advantages, although we have completed many personal signups for CH, we often find that this long-term rental agreement is favoured by VAT registered businesses such as sole traders, partnerships and limited companies. The main appeal for these types of businesses is that CH reduces the financial risk of owning a vehicle. For example, VAT registered businesses can claim back 50% of VAT on cars and 100% on vans- if the vehicle is solely used within the business then the asset can appear off-balance sheet meaning that you can claim it as a business expense! Secondly, CH protects you from depreciation since you never own it or have the responsibility to sell- you just hand it back at the end. Finally, there is an option to upgrade to a package that includes maintenance and repairs. Upgrading to this option can help to reduce unexpected motoring costs- all you would need to do is insure the car and pay for petrol!”
“Personal Contract Hire (PCH) is definitely a growing segment of the industry as it is a risk-free way to enjoy brand new cars every three or so years. The flexible contract duration and mileage rates ensure that the agreement is perfectly suited to all your requirements. Another benefit is that there is no large initial outlay for the vehicle, highlighting how PCH helps to make new vehicles financially viable and obtainable to individuals.”
With Contract Hire, you can enjoy incredible cars such as these…
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If you have your heart set on a new car and are still not sure which finance arrangement could benefit you most, our friendly team would be happy to help! Call the office on 01603 733500 today!