Contract Hire is by far the most common form of leasing package, and involves you taking control of a car for a fixed period of time in return for pre-agreed monthly repayments. During this time, you are in possession of the car but you are not the owner of the vehicle.
Within a contract hire agreement, you agree to make regular fixed monthly payments for the car, equating to the depreciation from the retail value of the car and the estimated future value (residual value) of the car at the end of the agreement. This future value is based upon multiple factors including depreciation, mileage and condition.
The main advantage of contract hire is that it enables you to fix your monthly costs, whilst not having to worry about depreciation risks or administrative concerns. It is popular amongst VAT-registered companies, as it usually enables them to reclaim 50% of the total costs of the hire, as well as 100% of the costs of any maintenance packages added to the vehicle. It is important to acknowledge, however, that there is no option to purchase the vehicle at the end of the agreement.
If an Contract Hire deal seems like the right business purchasing option for you then contact your nearest Vantage centre and ask to speak to the Business Centre Manager. You can use our meet the team function to get to know the Manager in your area. Alternatively you can submit an enquiry form online and the your local Business Centre Manager will get back to you shortly.