Business funding to suit your needs
Business Contract Hire explained
If you run a fleet of vehicles but want to avoid the high cost of ownership and maintenance, a Business Contract Hire agreement is the perfect leasing solution. It doesn't matter whether you're looking for a small fleet of executive vehicles or a larger fleet of working vans, business contract hire can offset purchase costs and improve cash flow.
How does business contract hire work?
A business contract hire lease provides a bespoke solution to building your car or van fleet. It enables you to increase or reduce the number of vehicles you require quickly and cost effectively. The vehicles remain the property of the leasing company, along with all the administrative functions such as vehicle road tax, insurance and maintenance. Contracts typically range between 24 - 60 months, although shorter term contracts can be arranged if required.
What are the benefits for my business?
Business contract hire ensures that your monthly vehicle costs remain fixed. This helps improve cash flow as you have just one monthly payment to account for.
For small to medium sized businesses, freeing up your capital (that might otherwise have been spent on vehicles) can be a big plus. What's more, because vehicles are usually a depreciating asset there is little chance of any significant return on investment if you purchase your own fleet outright.
Business contract hire also enables you to replace vehicles on a regular basis. Your brand image is improved and your employees are safer and happier in newer vehicles.
For VAT registered companies, the benefits of contract business hire vehicles are even greater. You can claim back 50% of the VAT paid on the finance element of the agreement and 100% of the VAT paid on the maintenance element is also reclaimable. A contract hire vehicle eliminates the stress of arranging vehicle maintenance.
In addition, business contract hire agreements can include clauses relating to the provision of courtesy vehicles ensuring that your business is never 'off the road' and can either be included in the contract or paid for on an 'as needed' basis which may be more cost effective for you.
How can I get the best deal for my contract hire vehicles?
At Excel-a-Rate, we work with our clients to provide a bespoke vehicle leasing package which will provide you with the best possible contract hire arrangement.
Contact us today for a no obligation consultation about your business finance options.