What is the appeal of Contract Hire?

S. Francis, Chatsbrook

What is the appeal of Contract Hire?

Armed with its enticing benefits, it is no wonder Contract Hire is fast becoming a hot topic within the automotive industry AND an increasingly popular finance option! Simon Meredith, Business Development Manager of Chatsbrook, states that “Contract Hire represents an agreement between two parties to lease a vehicle (car or van) for a set time period (and mileage) at a fixed monthly cost. To explain it simply, Contract Hire operates in the same vein as your mobile phone contract- you pay a fixed amount every month for a set amount of time and at the end of the agreement you can look for another arrangement to enjoy the latest release.”

Contract Hire (CH) has many advantages, although we have completed many personal signups for CH, we often find that this long-term rental agreement is favoured by VAT registered businesses such as sole traders, partnerships and limited companies. The main appeal for these types of businesses is that CH reduces the financial risk of owning a vehicle. For example, VAT registered businesses can claim back 50% of VAT on cars and 100% on vans- if the vehicle is solely used within the business then the asset can appear off-balance sheet meaning that you can claim it as a business expense! Secondly, CH protects you from depreciation since you never own it or have the responsibility to sell- you just hand it back at the end. Finally, there is an option to upgrade to a package that includes maintenance and repairs. Upgrading to this option can help to reduce unexpected motoring costs- all you would need to do is insure the car and pay for petrol!”

“Personal Contract Hire (PCH) is definitely a growing segment of the industry as it is a risk-free way to enjoy brand new cars every three or so years. The flexible contract duration and mileage rates ensure that the agreement is perfectly suited to all your requirements. Another benefit is that there is no large initial outlay for the vehicle, highlighting how PCH helps to make new vehicles financially viable and obtainable to individuals.”

With Contract Hire, you can enjoy incredible cars such as these…

Contact info@chatsbrook.co.uk if you have a car in mind, our team are happy to help!


What does a Contract Hire deal look like?

Click here to see!

“A typical CH offer may state something such as ‘3+35 10k £235 (inc VAT)’.

3+35 - This means it’s a 3-year contract with an initial payment of 3x your usual monthly rental. Therefore, you would pay £705 in the first month, followed by 35 regular monthly payments of £235. 10k explains that 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 within the 3-year period.”

Below shows an example of the Contract Hire adverts that Chatsbrook share every week, be sure to keep yourself updated on these amazing deals!!


What is the process involved with Contract Hire?

“The typical process of a Contract Hire agreement begins with a client choosing the manufacturer and model of a car or van- clients may have already spotted a CH deal. Chatsbrook listens to your preferences- such as how many months you wish to keep the car and complete the leg work for you to provide a bespoke CH agreement. Afterwards, we check the eligibility and finalise terms of the agreement. We keep in contact with the manufacturer or dealership up until the delivery of the vehicle. Throughout the contract, Chatsbrook offers complete guidance and support to our clients.”

Chatsbrook is dedicated to making your experience as simple as possible, so we have condensed the key information of Contract Hire into a table:

Click here to see.


If you have your heart set on a new car and are still not sure which finance arrangement could benefit you most, our friendly team would be happy to help! Call the office on 01603 733500 today!

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