Business Contract Hire, or Business Leasing, is a long-term rental agreement - generally for between two and five years.
Business Contract Hire is a popular way for businesses to fund new vehicles. Advantages include:
Low capital expenditure
Fixed monthly payments and fixed interest rates so you can manage cash flow
Rental payments can be offset against profits
Ongoing admin support and advice
Road Fund Licence covered for the term
Optional maintenance cover package, breakdown cover, replacement vehicle cover and GAP insurance
VAT registered businesses can claim 50% of the VAT back on the monthly payments for cars and up to 100% for commercial vehicles. For the maintenance element of contracts, VAT registered businesses can claim 100% of the VAT back.
At the end of the contract, businesses do not have to worry about disposing of the vehicle as vehicles are returned to the finance company.