Why You Might Want to Choose Contract Hire

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Why You Might Want to Choose Contract Hire
Contract hire is available for both business and personal
customers who are buying new cars. There are other options
available, such as paying for it in cash or taking out a special
car loan, but many people are realising that contract hire
holds many advantages that other forms of car purchasing do
not carry.
Have a look at - contract hire
Contact hire Vs purchasing outright
For a start, with car contract hire you are not purchasing the
car outright. There is no huge single outlay to record on the
books. You do not have to find all of the money in one go to
be able to drive away your car, or your fleet of cars.
Also, there is no vehicle at the end of the period that needs to
be disposed of with the costs associated with getting rid of the
vehicle when it comes to time to replace it. There is also no
depreciation to worry about between now and the end of the
contract.
Contract hire vs car loan
With a loan you are still left with a lump sum payment up
front as a deposit and quite often very high monthly interest
rates. And through the duration of your ownership of the new
vehicle, you are paying for everything. Should the car be
written off during that time you will need to continue paying

for the loan, unless you have suitable additional GAP
insurance to cover the costs.
With contract hire, you know exactly what your monthly
payments will be and you can even agree that little extras
such as maintenance and vehicle excise duty will be included
in the monthly fees.
What's next?
You agree with the firm that you are working with for how
many months your contract hire will last. You might want just
a couple of years or you might want to have the car for a lot
longer, it is up to you. Depending on you needs you might
even want to include some extras, such as maintenance and
car tax.
There are also other financial incentives for vehicle contract
hire, especially if you are in business. For example, the VAT
element of the monthly payments can be easily reclaimed for
VAT registered business.
Contract hire is a very good way of avoiding having to pay
out the full cost of the vehicle in one go whilst guaranteeing
your monthly payments. And usually, if you get to the end of
the hire period and want the car for a little while longer, you
can either extend the period of hire or even buy the car
outright.