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C - Contract hire

05 June 2006

Contract hire - This method of running a car is usually aimed at companies and individuals who are VAT-registered.

Instead of owning a car outright, you agree a period of time over which you will lease the car from the contract-hire supplier - usually two to four years. After this, you can either walk away with no further commitment or agree a deal for a new car.

Most contract-hire deals include servicing and maintenance, so the only thing you have to pay for is insurance and fuel. The advantages of this are that you do not have large amounts of money tied up in a car or fleet and you are not losing money through depreciation.

Glossary

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