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Contract hire is in short an extended version of car hire that is designed to make hiring a car cheaper over a longer period of time. Most contract hire deals are arranged over a period of two years or more and there is a considerable contract hire and car leasing industry in the UK.
This type of financing of a vehicle can make it easier for businesses to fund company cars as the payments are usually worked out on a monthly basis [link widoczny dla zalogowanych] and the [link widoczny dla zalogowanych] company or business can manage their payments with confidence that they will not increase dramatically over [link widoczny dla zalogowanych] time. It also means that you do not have to pay the large down payment that is often required with purchase.
The BVRLA is the industry representative body for car leasing and contract hire and it is designed to look out for the interests of both the providers of this service and the people that utilise it. They are said to have around two million vehicles under their membership. They [link widoczny dla zalogowanych] operate in a number of ways and service the industry in a number of ways such [link widoczny dla zalogowanych] as lobbying MPs to improve financial policies that affect the industry. With well over 50 companies in the UK that offer these financing deals they play a [link widoczny dla zalogowanych] very important role.
As well as the large major players in the industry there are also a number of brokers that serve the industry independently. These brokers search for the [link widoczny dla zalogowanych] best deals for people and are responsible for supplying over 300,000 vehicles per year. They operate by searching for the best deals on leasing and contract hire in relation to the needs of the customer and as a result they are able to make money by charging a fee or a margin. It is a popular option for people that want to work as sole traders as they can often maintain a reasonable income yet at the same time supporting local small businesses.
The majority of contract hire deals are arranged with businesses and companies. But they can also be arranged for personal use. Throughout [link widoczny dla zalogowanych] the arrangement the person or company that has leased the vehicle remains in possession of it and simply allows the person or company that leases it free access to the vehicle for the set amount of time and they are expected to pay a monthly fee for the use of [link widoczny dla zalogowanych] the car. This usually comes with the condition that the person meets a number of pre conceived agreements.
Contract hire brings a number of benefits to certain companies. It can provide a number of tax savings for people that use it for their companies. VAT registered companies usually opt for this option as there are tax [link widoczny dla zalogowanych] advantages and very little administration. It also makes it very easy to [link widoczny dla zalogowanych] manage a budget as the company can keep [link widoczny dla zalogowanych] on top of the monthly payments and with the possibility of maintenance cover there is little need to worry about unexpected costs.
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