Business Contract Hire is commonly referred to as vehicle lease and allows businesses a fixed payment method for the use of a vehicle for a term of normally between 12-48 months. The payments attract VAT of which for cars 50% and for commercial vehicles 100% of the finance element is reclaimable, 100% of the VAT for any maintenance payment is reclaimable. The rental payments are also classed as a true business expense so can be wholly offset against corporation tax. The benefits are fixed monthly payments with no disposal risk but reasonable care has to be taken of the vehicle and also there is an obligation to remain under the stated mileage at the contract inception or the finance company will levy a charge for loss of value.
Something that attracts a lot of people to take out a Business Contract Hire agreement is the low initial rental. Compared to how much you could pay for buying a car, the difference is staggering.
When working within a business, costings related to vehicles can often be a worry. If you choose a Business Contract Hire agreement, it will have fixed costs which includes the actual lease and road tax, and can include optional maintenance and servicing. Being able to plan how much you use a vehicle is crucial within a business, and fixed costings makes it so much easier. Any costings can be worked out well in advance before you even start using the car, so you will always be prepared. By saving money through car leasing, you use the money to invest in other parts of your business, allowing you to grow more and expand.
When you start a Business Contract Hire agreement, you agree on a predicted level of depreciation. Any depreciation that may occur will not compromise your contract. By not owning the vehicle, you do not have to worry about selling it on after your contract has ended. You can simply return it. Furthermore, in the same day as returning the vehicle, you can create another contract on a new vehicle.
If you're in need of a business contract hire car or van then be sure to get in touch with New Car Deal where one of our friendly team can help sort you out with your new car today! Call us 01785 257002 for a free quote.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
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