Contract hire (also called an operating lease) is a long-term rental agreement for a vehicle over a set time and mileage. You pay a fixed monthly rental to use the vehicle, with no ownership and no depreciation risk. At the end, you return the vehicle, subject to fair wear and tear and your agreed mileage, or extend the contract.
How does business contract hire work?
- Choose your vehicle, contract length and annual mileage.
- Pay an initial rental, then fixed monthly payments.
- Optionally add maintenance, so servicing and tyres are included.
- At the end, return the vehicle or extend your contract.
Got questions? We’ve got answers
Easy budgeting and better cashflow
With fixed monthly costs you always know where you are financially, so your business can benefit from accurate budgeting and improved cashflow.
No financial risk
The costs of ownership, like unexpected maintenance* or unpredictable resale values, rest with us so you can plan ahead with confidence.
Tax and balance sheet benefits
With Contract Hire you may be able to reclaim VAT on monthly rentals and even take your fleet off your company balance sheet.
Reduced capital expenditure
Buying vehicles is a significant business cost. Contract Hire can help you avoid that outlay and free-up capital that you can invest elsewhere to move your business forward.
Save time, hassle, and resources
Managing your fleet is quick and easy. Using our dedicated online portal, everything you need to configure, quote, order and more is at your fingertips.
*This only applies if you have chosen to include our maintenance package at the start of your contract.
Personal Contact Hire (PCH) is a popular and easy way to enjoy the benefits of a new car every few years, without having to purchase one outright.
When the contract is set up, you will agree an initial payment and an annual mileage allowance. These factors determine how much your monthly payments will be. With Personal Contract Hire, you drive the vehicle, pay the monthly fee for a set period of time (typically 24 to 60 months) and then return it at the end of the contract.
As ownership of the vehicle remains with us throughout, you can simply return your vehicle and walk away when your contract ends. Any excess mileage or damage charges may apply.
VAT: for cars, you can usually reclaim 50% of the VAT on the rental if the car is available for private use, or 100% if it’s used solely for business. You can reclaim 100% of the VAT on any maintenance element, and on vans used for business. Tax relief: the rental is deductible against your business profits, but if a car emits more than 50g/km of CO2, 15% of the rental is disallowed.
Talk to our experts
Get in touch with us to see if Business Contract Hire is the right finance option for you.
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