Contract hire and leasing VS car renting

Contract hire and leasing of vehicles is fast becoming a trend especially, in the UK. In recent years most people prefer to contract hire or lease their car rather than buy a new or used car. Leasing or contract hire of vehicles prevents people from tying up their capital in a depreciating asset. This is similar to renting a vehicle. However when you rent a car the disadvantage is, that over a period of time you end up paying the owner a greater sum than the initial cost of the car. In contract leasing and hire you will only pay an agreed estimation of the vehicles depreciation. Every car depreciates by almost 50% over three years. This value is set prior to the contract agreement. This goes to prove that contract hire/ leasing is more beneficial to you than buying a new car or renting a car.

 

Benefits of contract leasing

Stated here are a few benefits you can avail of if you contract hire or lease your vehicle:

·         Leasing a car allows you to drive away with a new car every few years and pay as little as half the original price.

·                     ⁽¹⁾The minimal initial expenditure (down payment) of approximately three months advance allows you to easily change your car to suit your family needs.

·                     ⁽¹⁾With contract hire and leasing you pay a fixed rate for your car every month, this allows you to accurately budget your cash flow forecast.

·                     The fixed monthly payment you make for your vehicle can also incorporate the vehicles maintenance, break down cover and relief vehicles.

·                     ⁽¹⁾The leasing company can reclaim all VAT on the vehicle purchase price to give you much lower monthly payments.

·                     ⁽¹⁾For new cars and VAT qualifying cars, assuming some personal use, the current legislation allows you to reclaim 50% VAT on your monthly rental against your VAT liability. The other 50% can be offset against your taxable profits.

·                     Some contract hire and leasing companies like FB Contracts include in the agreement replacement vehicles in the event of an accident or breakdown, full membership of a monitoring emergency programme including Home Start, Road Side Assistance, Relay, Relay Plus and European Cover, individual or fleet insurance cover, full range of competitive insurance products. 

 

Few disadvantages of contract hire and leasing

We could say the only disadvantage of contract hire and leasing is that you are held to the contract. This can be costly if you wish to break out or end the contract early. However the contract can be tailored to suit you that is, you can be given an option of how long you want to keep your vehicle.

 

Contract hire and FB Contracts

FB Contracts is a contract hire and van leasing company located in Swindon and Wiltshire. They have an online database of different cars, for you to choose from and your car will be delivered to you anywhere in the UK. FB Contracts has a number of vehicle leasing options these include contract hire, finance lease, flexi-lease, personal contract hire, sale and lease back among others. In addition their funding packages also offer customers a number of car insurance products and fuel card products.

 

 

 

 

⁽¹⁾Source: http://www.fbcontracts.co.uk