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What is contract hire? |
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Contract hire is the leasing of a vehicle, normally to a VAT-registered business or company, for a set time and mileage, at a fixed monthly rental. |
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In what circumstances is contract hire advisable? |
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This vehicle financing method is a popular choice for VAT-registered companies. If your business is looking for a comprehensive, fixed cost motoring package where full usage of a new vehicle is important, but ownership is not, then you should consider contract hire. Personal contract hire is a good option for those private individuals who are opting out of a company car scheme or who want fixed-cost motoring. |
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How does contract hire work?
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The monthly rental is calculated based upon the cost of the vehicle, the contract period and the anticipated resale value. It is also takes into consideration the predicted mileage, service and maintenance costs, together with any additional services such as relief vehicles. Under a contract hire agreement the funder retains ownership of the vehicle at all times and therefore continues to absorb the subsequent risks, such as unforeseen running costs and uncertain resale values. |
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What are the benefits of contract hire? |
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- A low initial outlay, usually 3 months’ advanced rentals
- Contracts available for periods of 2 to 5 years depending on the vehicle usage
- Monthly rentals are pre-determined for the entire contract period
- Known additional charge if the contract mileage is exceeded
- Road Fund Licence and Roadside Assistance are included with the contract
- As the vehicle is simply returned at the end of the contract, there are none of the problems or risks associated with disposal
- If registered for VAT your business may reclaim all, or some of the VAT payable on the finance element of the rentals
- This form of funding is considered to be “off balance sheet” and the vehicle will not be shown as an asset within the company’s balance sheet
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What types of vehicles do you have available? |
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Here at Glynns, we have 17 years of experience in the industry and have the buying power to offer you prices which you would normally associate with larger fleet companies. For this reason, we have a wide choice of vehicles available from practical family cars to luxury convertibles and vans. |
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Do you offer any other plans? |
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Yes, apart from contract hire, we can also offer you contract purchase, finance lease, hire purchase, personal contract hire and personal contract purchase. Our friendly and highly experienced consultants will be happy to talk you through each of the plans and discuss which is best for you. |
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