| What
is Contract Hire? |
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Contract Hire is a contract
for renting a vehicle. Contract hire has
many advantages, especially for businesses
as it can be tax efficient, cash flow friendly
and easy to administer.
|
| What
are the benefits of Contract Hire? |
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- No risk on vehicle disposals
- It is VAT efficient
- Minimal capital outlay
- It is tax deductable
- Little vehicle management
|
| How
are the costs worked out? |
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How do they work out
how much to charge?, well, they use a combination
of the interest it costs to fund a vehicle,
the amount of money they estimate that they
will be able to sell the car for when the
contract has finished, and the estimated
vehicles maintenance and service costs.
Now you may be saying to yourself that after
all that it would work out cheaper for you
to buy it yourself, but the contract hire
companies get massive savings on vehicles
partially due to the quantity they buy and
partially because of other market factors.
These savings are then passed on to you,
making contact hire a very real alternative
to purchasing a car
|
| Do
contracts vary between companies? |
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Well, the short answer
is yes, they do. Which is why it is imperative
that if you see an offer which seems too
good to be true, you should ask lots and
lots of questions, make sure there are no
hidden costs and that the company has a
solid reputation. When deciding who to deal
with, you should choose a company who you
find is fair, helpful and friendly as you
may need their assistance at some point
during the contract.
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| What
service options are usually included? |
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- Standard maintenance costs
- Batteries
- Exhausts
- Unlimited tyres
- Scheduled servicing
- Full breakdown cover
|
| Is
road fund licence included in the price? |
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The road fund licence
is included for the duration of the contract
|
| Is
Insurance included in the price? |
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We do not provide insurance,
but we can refer you to companies that are
specialists with corporate insurance
|
| Can
I alter my contract details after I have received
the car? |
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You can change your
contract by mileage, contract type or term
anytime before the last 6 months of the
contract.
|
What
happens if I go over my contracted mileage?
|
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If you exceed the number
of miles that your contract states you will
have to pay the excess mileage charge which
is payable at the end of the contract. However
we can change your contract anytime before
the last 6 months so this might prevent
you from having to pay the excess mileage
|
| Does
benefit in kind tax still apply with Contract
Hire? |
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Yes, Contract Hire
is only a means of funding and managing
a vehicle to your company, this does not
make any difference to the benefit in kind
tax
|
| Can
I cancel my contract whenever i wish? |
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You can cancel your
contract at any time but you will still
be liable for the amount of outstanding
rentals. However some contracts allow for
a 50% discount on the balance of rentals
still due to be paid after cancellation
|
| What
happens to the car when the contract is finished? |
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If your company does
not mind, then we can give the driver the
chance to buy the car at the end of the
contract. The price will be what is considered
to be the trade value of the vehicle at
the time of sale
|
What
financial information do you require to
arrange credit facilities?
|
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So that we can propose you to the finance underwriter we require as much information
as you are ready to offer. The majority
of our clients just need to provide recent
accounts, if you these are not available
to you, management accounts or bank statements
maybe sufficient |
I
am a new business, will this cause a problem
in arranging credit for me?
|
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| This may not be a problem, if
you have a well thought out business plan
and can demonstrate that you are financially
viable then we can usually help |
