Van Contract Hire Explained
We take a closer look at Contract Hire...
Choosing a new van for your business can be both exciting and a bit confusing. We’re here to make the experience as easy as possible!
Investing in new assets such as vans signifies that your business is heading in the right direction. However, with numerous finance options available, how do you navigate this area successfully? Here, we'll explain one of the most popular finance options: Contract Hire.
What is Contract Hire?
Contract Hire is a popular form of vehicle leasing. It is similar to Finance Lease in that it provides you with the use of a van for a fixed monthly cost over an agreed period. This is typically between two to five years, with three-year agreements being the most common. However, unlike Finance Lease, you do not have the option to purchase the vehicle at the end of the agreement.
Check out the advantages of Contract Hire agreements below. We have also highlighted some areas that require your attention. Overlooking any of these aspects could result in significant costs for your business.
- Generally lower monthly payments compared to the other types of financing.
- No balloon payments at the end, meaning you can hand the vehicle back without worry.
- You have access to new vehicles all the time and you'll never drive a vehicle older than the contract term.
Points to consider
- Regular maintenance can be taken care of with a maintenance package, which is available with nearly all Contract Hire deals. This ensures your vans are kept in top condition, minimising staff downtime.
- Inclusive breakdown cover is provided, eliminating the need to buy it separately.
- MOTs and tyres can also be covered in the maintenance package if you choose to include them. However, you may be responsible for these costs if you opt for a 'Customer Maintained' agreement.
- Courtesy vehicles may or may not be included, so it's essential to check before signing the agreement.
- Any damage to the vehicle that is deemed to be beyond the BVRLA Fair Wear and Tear guidelines may result in additional charges.
At Vansdirect, we have a dedicated team of specialists ready to assist you in finding your ideal van and finance deal. Contact us today to secure a great deal.