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Finance: Contract hire

Contract Hire* advantages:

  • Lower risk for your business - The vehicle is returned at the end of the contract, avoiding any depreciation or disposal risks.
  • Improved cash flow control - Rentals are fixed for the duration of your agreement, so you are protected from fluctuations in interest rates.
  • Better balance sheet - You don't own the vehicle, therefore your balance sheet ratios may be improved and the VAT is reflected in lower rental costs. Your business will benefit from writing down allowances through lower rentals.
  • Reclaim VAT - If it is for private use, the VAT recovery on the finance element is restricted to 50% (although a proportion may be charged to Profit and Loss). VAT recovery on the service element remains 100% regardless of private use.
  • Protect your capital budgets - Contract Hire rentals are treated as a revenue item, leaving your capital budgets unaffected.
  • Rentals chargeable against taxable profits - Rentals are chargeable against your taxable profits so it may be possible to reduce your tax liability, although restrictions do apply on vehicles costing more than £12,000.
  • Replacement vehicles - In the event of accident or breakdown, replacement vehicles are possible.

Personal Contract Hire*

Personal Contract Hire, as name suggests, is essentially the same as Contract Hire but for private individuals. If you want fixed cost motoring, or have opted out of a company car scheme, then Personal Contract Hire could provide you with hassle free motoring without the residual value risks associated with traditional ownership.

VAT is not reclaimable by private individuals. Maintenance packages are usually available at an additional cost so you can have totally fixed costs for your motoring.

View sample of deals currently available

How to get the best possible Contract Hire or Lease Purchase deal...

In order to obtain the best possible Contract Hire or Lease deal in the current market you will need to get dealers to compete against each other in our reverse auction to win your business.

We would recommend initially obtaining the best offers you are able to obtain from your local dealer as well as using the links to the right of this page.

Once you feel you have shopped around to get the best deal, you should make a single application with that provider to confirm if indeed you are eligible for the offer.

Make sure you do not sign any agreements or pay any deposits at this stage. You should purely ask the provider to confirm if they are able to provide you with the finance.

If you have been accepted you will now be in the strongest position to get dealers to beat the best deal you have been able to obtain.

To do this simply select the car you require from our website (Step 1). You will be shown a cash price, this price may be lower than the one you have been offered or even more expensive. When you get to (Step 3) you can set your finance conditions. You do this by simply adding the best deal you have been offered in the “other comments box at the bottom of step 3” e.g:

Contract Hire, 36 months (£329 monthly + VAT), (3+33 payment profile, or deposit amount), based on 12,000 miles annually (no maintenance).

It’s important to display all the information including:

Loan type (Contract Hire or Lease)
Loan period (Months)
Monthly payment (£the best firm offer you have been quoted and accepted on finance)
The deposit amount in £ or amount of monthly payments as deposit (e.g.3)
The annual miles the contract is based on (miles)
If maintenance is included (not usually)

What ever monthly payment you state will need to be beaten by a minimum of £500 over the loan term with all the other conditions being maintained.

In the above example of £329 monthly the target price dealers will need to come in at will therefore be £315.11 monthly with the period, deposit and miles.

This will give you a guaranteed minimum saving of at least £151 once you have paid our fee of £340. We would hope to get you a much larger saving however you will only be committed to pay our fee if we beat your monthly payment by £500 over the loan period as in the example above.

*Finance is provided, subject to status, by our finance partners. We would recommend you confirm your finance eligibility prior to placing an order with us through equifax.co.uk or experian.co.uk. If you place an order with us for finance and you are rejected on finance our fee will not be refundable. To apply, you must be at least 18 years old and a UK resident (excluding the Channel Islands and the Isle of Man). If you exceed the agreed contract mileage, there will be an excess mileage charge which will not exceed 23p per mile. In addition, you will be liable to pay for any accidental damage to the vehicle or excess wear and tear, with regard to its age and mileage.