Understanding Contract Hire & Leasing

Admin| September 24, 2009 | 1 Comment

When going through your different leasing options, you often come across one referred to as the Contract Hire leasing option. This option has many benefits which has made it one of the most popular choices available. Some of the benefits include the fixed monthly payments. This is more important now than ever before with the changes the economy is going through. You have no way of knowing what will happen from one day to the next so, it’s nice to have a little security and know that your payments won’t change.

The monthly payments with this option can be lower than what you may pay with some of the others. This is due to the leasing company being able to reclaim all VAT on the purchase price of the vehicle. You can also receive full maintenance service as part of this option. In other words, all you have to worry about is the general maintenance and taking the vehicle to be serviced. There are several other services that can be included in the Contract Hire leasing option as well. These will be discussed with you before signing the contract so you can choose the ones you want to add.

Before the contract is signed, you’ll both have to come to terms and agree on the annual mileage allowed, rental fee and the maintenance options. Once this is done, you’re ready to receive your new leased vehicle. As long as the vehicle is still in good shape at the end of the contract and the mileage agreement has not been exceeded, all obligations pertaining to the vehicle ends.

It’s a great option for anyone who likes to keep things simple because you’ll know exactly what is expected from you concerning the leased vehicle. The main disadvantage of the Contract Hire option is the fact that it’s a fixed contract. What this means is that it has a specific time frame from the beginning to the end of the agreement. If, for any reason, you decide to end the contract early, you will most likely have to pay an early termination fee so be aware of this before you make your final decision.

I recommend Futlon for contract hire, car leasing and  van leasing

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