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What Is Contract Hire?

The offers on our website are based on contract hire for business or personal contract hire. Contract Hire (most commonly known as Leasing) is a form of finance and therefore you will be asked to complete a credit application form. It funds the use of the vehicle, you are not buying the vehicle. Business contract hire will be shown excluding VAT and personal will be shown inclusive of VAT.

The monthly amount you pay on Contract hire for a specific vehicle can vary depending on 3 things:

  1. The amount of miles you will drive over the course of a year - an increase in mileage will mean an increase in monthly payment.
  2. The length of contract you take out – Usually the longer the contract will mean the monthly payment will be lower but you should check as this is not always the case.
  3. The amount you pay as your Initial Payment - By paying more money upfront you will reduce the amount payable each month.

Risks involved

You are responsible for the condition of the vehicle. If a vehicle is returned damaged you will be charged for the repair. You can see what is classed as acceptable in our fair wear and tear guide.

It is important when taking out contract hire on a vehicle that you estimate your mileage as close as possible to what you will actually use. Don’t just take the cheaper option as when the vehicle is returned if you have gone over the mileage on your contract, you will be charged an excess mileage charge, there’s more on how excess mileages work here. Details of excess mileage charges should be shown in your finance paperwork.

A typical contract hire offer would look like this:

  • 3+35 10k £235 (inc VAT).

3+35 - This means it’s a 3 year contact with an initial payment of 3x your usual monthly rental. Therefore you would pay £705 in month 1 followed by 35 regular monthly payments of £235. There’s more on how contract hire terms work here.

10k – this offer is based on 10,000 miles per year however as it’s a 3 year contract you have a total of 30,000 miles to cover the 3 year period. If you only use 8000 miles in year 1 then the leftover miles can be used in the next 2 years etc. There’s more on how yearly mileages work here.

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