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Finance Types

Business Contract Hire

With Business Contract Hire you hire the vehicle for an agreed term these range between 12 and 48 months, this is based on a fixed monthly payment until the end of contract on the mileage you will do over the contact term so in real terms you are paying for the predicted depreciation of the vehicle and interest. All payments are subject to VAT of which 50% is reclaimable; also the monthly payment can be offset against profits up to 100%.

Benefits

• Maintenance packages can be added
• Fixed costs
• Lower deposit
• Lower payments, especially on prestige vehicles with there strong residual values.

Leasing companies since August 1995 can reclaim the VAT content on the purchase of vehicles, this allowing a lessee paying less per month on vehicle rental because:

• Depreciation of the vehicle is on net of the VAT cost price, so initially saving an amount of depreciation.
• The interest charges are applied to the net of VAT cost price for example a £25,000 vehicle would be £ minus the VAT content allowing savings on interest charges.