New Car Deal

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Frequently Asked Questions

1. What is Contract Hire?

Contract Hire is a contract between an individual or business, and a finance company, with specific parameters such as mileage, term and monthly rental set at the beginning. Contract Hire is sometimes known as a 'lease' or 'operating lease' and is available on most makes and model of car or van. If you like to have a new vehicle every 2, 3 or 4 years, then contract hire is a very cost effective way for you to do this. Maintenance contracts are also available to cover items like tyres, wear and tear and servicing.

2. How is Personal Contract Hire different?

Personal Contract Hire allows private individuals to fix the cost of their motoring so as not to receive any unexpected charges. Personal Contract Hire is suitable for any person who needs a car for private use or a vehicle for work [and has opted to receive a company car allowance from their company for example]. This is a contract between a finance company and an individual and will normally include the vehicles road tax for the duration of the contract. Maintenance contracts are also available to personal customers to cover items like tyres, wear and tear and servicing.

3. What are the benefits to businesses of using Business Contract Hire?

Business Contract Hire is a cost effective way of running one or more company cars, allowing customers to fix costs and control maintenance costs. Businesses can have a reliable car fleet reducing downtime and increasing efficiency. A percentage of VAT can be reclaimed by businesses on lease cars and there are various tax advantages available. Always check with your accountant on how a lease can work for your business. Contract hiring cars and vans can also help business cash flow by retaining working capital and instead opting for a fixed monthly rental.

4. Are there any other schemes I should consider?

Owning the vehicle is sometimes the reason people choose to buy a car or van instead of contract hiring. PCP or Personal Contract Purchase gives you all the advantages of leasing a car but with the option to buy the car for an agreed price at the end of the finance contract, this is known as the Balloon Payment or Guaranteed Future Value [GFV]. Most PCP agreements require a deposit and the value of the deposit can be varied, unlike Business or Personal Contract Hire where you are asked for 1, 3, 6, 9 or 12 times the monthly rental as an initial rental. PCP does not attract VAT so the monthly rental you see is what you will pay. The GFV balloon amount on a PCP agreement is guaranteed not to change from the figure set at the beginning of the contract, but it is also worth mentioning that at the end of the contract, you can just hand the vehicle back and not pay the GFV balloon payment. We can offer PCP on most cars over 2, 3 or 4 years.

5. What about HP?

HP, or hire purchase is a scheme that should also be considered. With HP, you can finance any value almost, so if a car is £20,000, you could finance £5000 of that amount, of you could finance the whole amount. However, showing a bigger deposit is more favourable with finance companies. With this scheme, your payment term and monthly payment amount is set at the beginning and fixed. HP payments do not attract VAT so what you see is what you pay, like on PCP. The upside of HP is that you own the vehicle once all the payments have been made as no balloon payment is payable at the end. The downside of HP is that payments are generally higher because there is no deferred balloon amount payable at the end. HP is popular still as interest rates can often be better than on PCP. We can offer HP on most cars and vans over 2, 3, 4 or 5 years.

6. What about VAT registered businesses that normally buy vans and run them until they drop?

If the above describes your business, then we can still help you. We can supply massive discounts on most makes of vans, and then apply a number of different finance options to them. Normally, you'd have to pay the VAT and road tax up front, but then claim the VAT back in your next VAT return. Then the balance can be calculated on Hire Purchase so that you own the van at the end of the payments.

7. We are a business that has a number of vans that we run locally so our mileage is not huge, but we like to keep our vans smart and up to date to impress our customers, what should we do?

Sounds like a great example of a business that should use contract hire - you get a new van, use it for up to 4 years, then give it back and start again with another new van. As long as you keep within the agreed contract mileage, you won't have any problems with contract hire.

8. What about the mileage restictions on contract hire?

We sometimes get customers saying that they think they'll do 10,000 miles per year but it may go up to 12,000 miles per annum, what should I do? Our advice in this case is always to go slightly higher if you think this may be the case, the reason being that once under contract for a certain mileage, if you exceed that mileage, you will be charged, in pence, for every mile you go over your agreed mileage. Often the difference at the beginning when setting the contract up can be as little as a few pounds a month between say 10,000 and 12,000 miles per annum, which would probably be cheaper than paying the excess mileage. We can always run quotes on mileage variations if you think this may be applicable to you.

9. The make of car or van I want is not shown on your website, do you do it?

Probably not I am afraid, we try to list all makes and models that we can offer, sorry.

10. Is VAT included in the prices shown on your website?

NO: VAT is not included on the Business Contract Hire rates shown, but... 
YES: it is included on the Personal Contract Hire deals shown on our website.

11. If I want to go ahead with a deal on the website, who do I deal with?

We are the broker promoting the deal so you always deal with us; we will see you all the way through from sending you the proposal form right the way through to arranging the delivery of your new car or van.

12. Where do the vehicles you supply come from?

All our cars and vans are supplied only direct from UK main dealers for all brands, and in most cases the contract deals you will see will be underwritten by either the manufacturer concerned or a major funder. This means that the vehicle has full UK warranty and can be taken to any UK dealer of that brand for servicing or warranty work.

13. Is Contract Hire right for me?

Contract Hire will NOT normally work for people [1] who want to put a large deposit down and pay a monthly payment for a fixed term to then own the vehicle at the end of the agreement; or [2] people who do over 40,000 miles per year [diesel], or over 33,000 miles per year [petrol] as most leasing companies will limit the contract mileages at these levels.

14. I cannot afford the payments anymore, what should I do?

In this instance we recommend you contact the finance company immediately, do not leave it and miss payments as this will be detrimental on your credit rating. Most finance companies have departments that will help you chose the correct option to end your lease or arrange repayment plans.

15. I no longer wish to lease a car, what can I do to give the car back?

Most finance companies will allow you to return the car but be prepared to pay a cancellation fee which in most cases will be a large percentage of the remaining rentals.

16. I have decided I wish to get a new car and I still have a year left on my current contract hire agreement, what can I do?

As in the previous question, the fee to cancel is normally a large percentage of the remaining rentals, some finance companies will take this fee and add it into the new lease you wish to take, but beware that this will increase your monthly rental on the new lease, but it does get you into the car you want. Again, speak to your funder and see what they say.

Contact us

Email :

Telephone : 01785 257002

Company Address :
New Car Deal
Unit 22
Hollins Business Centre
Rowley Street
Stafford, Staffs
ST16 2RH

New Car Deal are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 675571

Registered in England & Wales with company number : 4924900 | Data Protection No : Z8938862 | VAT No : 823748807

Registered Office : Lymore Villa, 162A London Road, Newcastle, Staffs. ST5 7JB

Disclaimer: All vehicle images and descriptions are for illustration and reference purposes only, all vehicle leases are subject to credit approval and subject to change at any time. E&OE.

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