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What is Business Contract Hire (BCH)?

Should you consider Business Contract Hire? We tell you everything you need to know...

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Business Contract Hire (BCH) is very popular among companies, and it works the same as Personal Contract Hire (PCH), although it is exclusive to businesses. As with Personal Contract Hire (PCH), the contract is based on a fixed term and mileage, but the difference is that you can claim back some of the VAT.

Here are some positives for BCH, and some things to remember:


  • For an additional monthly fee, you can have a completely hassle-free experience, some lease companies will offer maintenance packages that will cover nearly every expense associated with owning a vehicle.
  • Some of or all of the VAT on the rental can be reclaimed, depending on if the vehicle is solely for business use.
  • The monthly repayments often work out cheaper than buying the car.
  • Your company/business fleet will always have the latest cars and technology, so will benefit from the latest fuel-saving developments.
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  • You will agree to a maximum annual-mileage figure, beware of excess-mileage charges if this is exceeded.
  • You will not have the option to purchase the vehicle at the end of the agreement. If you would like to keep the vehicle at the end of the contract then perhaps a hire purchase deal might be better for you?
  • You must ensure that the car is properly insured and maintained. Standard wear and tear are allowed - you can check the fair wear and tear guide at the beginning of your agreed lease to make yourself aware of what may be deemed as acceptable.

So, is business contract hire the right option for you? This option is perfect for businesses and companies looking for a fleet of cars, each individually catered to the needs of the employee. Being flexible with the changing market in companies, BCH agreements are generally between 12 and 48 months long, which allows the company to respond to changes in employee requirements rather than alternative methods.

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