Business Contract Hire
What is Business Contract Hire?
Business contract hire is a funding method suitable for business entities & companies registered for VAT – up to 100% of VAT can be reclaimed, provided there is no element of personal use. If there is an element of personal use, then only 50% of the VAT is reclaimable.
Vehicles are hired for an agreed period of time, usually between 24 and 60 months. A rental is paid based on a pre-agreed mileage. Agreements can include the full maintenance of the vehicle including all consumable items such as tyres and brakes. Your road tax will also be included as part of the deal.
At the end of the contract, the vehicle is simply returned to ourselves, alleviating any disposal issues or depreciation risks. Up to 100% of rentals can be offset against taxable profits, subject to some revenue limitations.
Prices vary accordingly depending on the vehicle you wish to lease, along with a number of other features included in the deal. The total monthly cost will be determined by factors such as:
- The vehicle leased.
- The agreed annual mileage.
- Whether maintenance costs are included.
- The contracts agreed time period.
If you're looking for a company car, a fleet or a vehicle you can use for work purposes, contract hire could be a great option for you.
The benefits of Business Contract Hire
There are a number of superb benefits associated with contract hire. On top of the VAT advantages outlined above, your business would:
- Spend less money on taking a loan for a new vehicle or committing to a hire purchase agreement.
- Pay a fixed monthly rate.
- Avoid the risk of losing money in depreciation value.
- Choose the exact requirements your business requires for the hire period, including mileage.
- Be able to replace vehicles as and when the company saw fit, without hassle or inconvenience.
- Take advantage of maintenance costs, services and MOTs included as part of the agreement.
- Ensure employees are travelling in new vehicles to promote a positive and successful image for the business.
How does Contract Hire and Business Car Leasing work in the UK?
With a Contract Hire agreement, you’ll make an initial deposit, followed by regular monthly instalments. At the end of the contract, the vehicle is returned and you’ll be able to take up a new leasing arrangement.
The down payment is typically between 3 and 6 months worth of rental with options of 9 and 12 also available. It will also be affected by the number of miles you agree on an annual basis.
- Off-balance-sheet funding as all ‘risk and reward’ remains with Autograph.
- Rental allowances typically provide accelerated tax benefits.
- Removes disposal risk and protects your future profits.
- A maintenance-inclusive agreement will remove the inherent risks associated with running a fleet of company vehicles.
- Your monthly fleet outgoings are fixed and incorporate realistic running costs, giving you greater budgetary control.
- Lines of credit can be better utilised for investment in your core business.
- Flexible company car leasing contracts to reflect the changing nature of your business.
If you're interested in all the perks of a contract hire deal, why not take a look at some of the best prices on Autograph Contracts and get in touch with our team today to arrange your own bespoke quote. You can call us today on 01634 687070 for more information & advice.
Business Car Leasing by Car Manufacturer
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Call 01634 687070 for your own bespoke quote on any make or model or view our Business Car Leasing Deals here.