What Is Contract Hire?
What is Contract Hire?
Business Contract Hire and Personal Contract Hire (PCH) are a form of leasing. It’s a long-term rental agreement whereby you have the use of a vehicle for a fixed period of time usually between 2 and 5 years and for a predetermined mileage at a fixed price, which is called a rental.
The rental that you pay will be determined by a number of factors including:
What the vehicle is (the make, model, derivative etc)
The purchase price of the vehicle (utilising both ours and the contract hire company’s enormous buying power)
The anticipated value of the vehicle at the end of the contract taking in to account its age and mileage (which is called the residual value)
The difference between the purchase price and the residual value is the cost of ownership to the finance company who purchase and own the vehicle that is hired and is commonly termed depreciation. The depreciation plus the finance company’s charges and their profit margin is the amount that will be charged to you for the rental. To arrive at the monthly rental figure, the total rental cost less the initial rental is divided over the term of the agreement.
Why Should I Contract Hire?
Contract Hire has become increasingly popular in both the corporate and private sectors.
Get a really good deal
We have relationships with the UK’s top funders. Between us, we buy thousands of vehicles every year allowing us to negotiate and secure fantastic discounts, which are far greater than those offered to general consumers. Plus being independent, we’re free to shop around for the best deal resulting in our ability to offer highly competitive deals.
Drive the vehicle that you want
Why would you want to incur a substantial outlay to own something which simply depreciates in value? Contract Hire offers you the ability to drive the vehicle of your choice with a low initial outlay, to include a service and maintenance package giving fixed cost motoring, no issues of disposal and for businesses it has tax and VAT advantages too.
A new vehicle every few years
Having the ability to change your vehicle every few years enables you to take advantage of the latest models, new technology and improved running costs.
Is Contract Hire suitable for you?
If Contract Hire isn’t right for you, we have a range of different finance options. Please call us and we’ll talk you through the options.