Contract Hire- The Basics
Under a contract hire agreement, you agree to lease the vehicle for a fixed period (usually 24-48 months) and agreed maximum mileage (e.g. 10 or 20k per annum). You make one initial rental payment (typically 3-6 months rental) and then make a fixed monthly payment for the duration of the contract. Road tax is included for the term of the lease, but you will need to maintain (service) the vehicle to manufacturer's guidelines and insure it. The car never belongs to you, and at the end of the contract you return it to us.
No depreciation to worry about
No disposal hassle
You may be able to afford a newer or higher specification car than you thought
Maintenance cover can often be added to help you fix your motoring costs
If you're a private individual aged over 18 and permanently resident in the UK, you can apply for a personal lease, also known as personal contract hire. We will need some basic information, including a completed proposal form, proof of your ID (e.g. a driving licence or passport) and address (e.g. a council tax or utility bill) and some recent bank statements (we can usually accept good quality copies of these documents) and we will run a check with one of the credit reference agencies. Our underwriting team will then assess your application and, all being well, confirm that we are happy to fund you.
Don't worry if you have bad credit- we specialise in helping people even if they have been previously declined.
Contract hire was originally designed with business in mind, and there are several great advantages:
Business users can reclaim much of the VAT.
Rental charges can be set off against taxable profits
Frees capital for investment in other parts of your business. Moreover, leases do not appear on your balance sheet, so contract hire could improve your RoA, liquidity ratio and gearing.