Contract hire is frequently the first choice for business.
It provides the use of a vehicle at a fixed monthly cost that can even include full servicing and maintenance costs, tires and road fund renewal. This delivers a regular motoring cost for budgeting purposes, contract hire also enables a flexible method of off balance sheet funding.
Current UK tax legislation also helps to keep contract hire prices lower.
Businesses may be able to reclaim up to 50% of the VAT payable on the monthly rentals if for registered business users with a proportion of private vehicle usage.
Additionally the full VAT on the service / maintenance element (if taken) may be recoverable in full.
Contract hire additional options.
1/ Servicing costs
2/ Maintenance costs
3/ Tyre replacement (normal wear and tear only)
4/ A replacement vehicle following an accident or breakdown or during services
Contract hire is available on 12 to 36 months’ terms.
The level of the monthly payment is calculated on:
1/ The vehicle value
2/ The initial rental
3/ The length of the rental period (12 – 36 Mth’s)
4/ The agreed annual mileage
5/ The exact package to suit your needs.
After the agreed period you return the vehicle and there is nothing more to pay as long as all the payments are met and all terms and conditions of the contract have been met.
Taxation, legislation and accounting practises are subject to change and current business allowances can be changed at any time, for specific guidance you should contact your own financial advisor in these regards.