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Business Contract Hire for Cars

Business Contract Hire is the perfect product for you if you want fixed cost motoring and are confident about the mileage and condition of your car over a set period of time. It is an easy and cost-effective way to fund vehicles, which would enable you to control one of your biggest expenses.

Contract hire is the most popular type of vehicle leasing. The car is hired for a set period of time and pre-determined mileage at fixed monthly rentals. Because you never own the car, at the end of the contract the finance company will collect it and dispose of it.

There is the option to include a maintenance package in the monthly rentals. Monthly rentals will depend on the value of the car, length of the contract, and the agreed mileage. Find out more about the factors affecting the price of your car lease.


  • Low initial rental, typically equivalent to 3 monthly rentals
  • Choice of contract period from 24 to 60 months
  • Hassle free: Option to add servicing and maintenance, taking away all the hassle of running a vehicle
  • Fixed cost motoring
  • Steady cash flow
  • Free up capital: Get a new vehicle without the upfront costs, freeing up money for you to invest elsewhere in your business
  • No risk: The risks on vehicle depreciation and maintenance is eliminated. At the end of the contract, the vehicle is simply handed back without worrying about how much it might be worth
  • Less administration: The finance company deals with all the buying, maintenance and selling issues
  • Tax benefits: Reclaim up to 50% of the VAT on all maintenance charges, the lease rental the fees and finance element for cars
  • Rentals are up to 50% allowable against corporation tax
  • Road Fund Licence is provided for the full term of the contract
  • The vehicle appears off 'Balance Sheet' as it is owned by the leasing company


  • You will need to estimate the time and mileage for the use of the car
  • No option to purchase the vehicle
  • The cost to terminate the contract early can be expensive
  • If you go over their agreed mileage allowance, excess mileage will be charged for each mile over that is stated in the contract
  • You must look after the car and return in a well maintained condition, if not you will be charged for any damage over and above as stated in the 'Fair Wear and Tear Guide'


This would suit customers who:
Know exactly how long they want to keep the car and a good idea of the mileage they will be doing.
Wants to avoid the risk of depreciation and maintenance costs.
Wants fixed cost, stress free motoring.
Are not worried about owning a car.

Car Contract Hire FAQs

Please just click on a question to reveal the answer.

Contract Hire

What are the advantages of car Contract Hire?

Apart from the advantage of being able to acquire a brand new car, often more cheaply than a used car would cost on Hire Purchase (HP), Contract Hire will benefit anyone who is seeking to:

  • Remove assets from their balance sheet, as there is no need to worry about cash flow/gearing.
  • Eliminate the financial risk associated with disposing of the car. You can let the funder worry about depreciation and negative equity and just enjoy the convenience of a full maintenance service, which will include routine maintenance, servicing, tyres etc, at a fixed monthly cost.

You will enjoy a low initial rental, typically equivalent to 3 months' rentals. What's more, you can even offset your monthly rentals against taxable profits and, if you're VAT registered, up to 50% of this can be claimed back too.

With Contract Hire, do I have the option to keep my car at the end of the agreement?

With this type of contract, you simply hand back the car at the end of the contract, leaving you free to contract hire a brand new car. There is not an option to take ownership.

Do I have to be VAT registered to opt for Contract Hire on a car?

No. Certain funders do stipulate that you must be VAT registered but we have access to a number of funders for whom this is not a requirement. If you do become VAT registered during the course of the contract, you will be able to start claiming the VAT back.

Can I claim the VAT back on car Contract Hire rentals?

If you're VAT registered, you can claim back up to 50% of the VAT from your monthly rentals.

Are there any mileage limits?

There are limits but you determine these at the beginning of the contract period, so it's important that you give us a realistic estimate of what your annual mileage is likely to be. But don't worry if your circumstances change. You can amend the terms of your contract to reflect a higher mileage, after the first 12 months, in order to spread the cost. If you go over their agreed mileage allowance, excess mileage will be charged for each mile over that is stated in the contract.

Can I change my car mileage during the agreement?

Yes. After the first 12 months, you will be able to request a contract amend so that changes in your circumstances can be reflected in your monthly rental, rather than waiting for a bill at the end of the contract.

Can I extend the car Contract Hire agreement?

Although most funders will have upper limits on contract length and mileage, it is possible to amend your contract during the term, as long as you stay within these limits.

What age do I need to be to take out a Contract Hire agreement on a new car?

Under the Consumer Credit Act, you have to be at least 18 to apply for credit. However, some funders insist on 21 as a minimum age, due to the need to see some credit history.

What deposit do I need to put down to secure the car?

Contract Hire allows for low initial rentals. These are typically equivalent to 3 rentals in advance but, depending on circumstances, could be as low as 1 rental in advance.


Do I have to have a credit check to get a car on Contract Hire?

Yes. All Contract Hire Funders will conduct a credit check. However, as all Funders have slightly different underwriting criteria, we will do our best to find the right Funder for you and your circumstances.

How long does approval take?

This can vary depending on the Funder. It can take as little as an hour to get a decision, but we can usually get an answer for you with 24 hours. We will sometimes get requests for further information and, in these cases, it can take slightly longer to get the final decision.

What if I get turned down, will this impact future credit ratings?

Most credit checks will leave a 'footprint' but in most cases, only repeated checks will have a negative effect.

What can I do if I have a bad credit history?

It really depends on what kind of bad credit history you have. Different Funders have different criteria and some can be more pragmatic than others. There are no guarantees, but we will always try to match you with the most appropriate Funder.

Do you use various finance companies?

Yes. We have access to all the top car finance companies in the country and the amount of business we do with them means that we (and you!) can enjoy their very best rates.

What information do you need to set up a Contract Hire agreement?

All our customers must be assessed for credit before they are accepted by the finance company (Funder). Although different Funders will have differing underwriting criteria, some typical examples of the information needed would be:

  • Name, address, landline number
  • Company name and company registration number (for limited companies)
  • Address history for the last 5 years
  • Number of years trading/ownership
  • Directors details¬† (for limited companies)
  • Bank details


Do I own the car on Contract Hire?

No. The car remains the property of the Funder throughout the contract. This means that they also carry the residual risk (depreciation) of the car.

What will happen to the car at the end of the agreement?

You simply need to advise the Funder to collect the car from you at a time and place to suit you.

Will I be responsible for parking tickets and speeding fines?

Yes, although if these are not settled straight away, the authority responsible for the offence will contact the Funder who supplied the car. An additional admin fee may be charged by the Funder if they have to pay the fine on your behalf.

Who pays for new tyres/MOT/servicing if I have taken the car out on Contract Hire?

With Contract Hire, you have the option to include a maintenance package for an additional monthly fee. This will cover you for tyres, routing maintenance, servicing and any MOT that falls within the contract duration.

What happens if the car is in an accident during the Contract Hire period?

You are responsible for insuring the car during the term of the contract. If your car is involved in an accident, you should contact your insurance company in the same way as you would for a privately owned car. We can offer GAP insurance which is designed to cover you if there is any shortfall (between the finance settlement figure and what your insurance company are willing to pay out) following a total loss, i.e. if the car was written off or stolen.

What happens if there are dents and scratches on the car when I return it?

Funders will charge for damage that is over and above what is acceptable under the BVRLA's Fair Wear and Tear Guide. It is easy to find out what would be chargeable and what would be considered 'fair wear and tear', so you have the opportunity to put right any significant damage before you return the car. Click on the link above for more details.

Can I customise the car e.g. tint windows, or lower it?

Some customisation is acceptable and accessories to enable you to perform your job will usually be permitted. These can be included as part of your contract, so that you pay monthly for them, or you can sometime opt to pay for them separately. It is always best to get permission from the finance company before customising your vehicle to avoid any unexpected charges.

Can I take my car abroad during the Contract Hire term?

Yes. However you will need to obtain the appropriate paperwork from the Funder in question. Remember to give sufficient notice for the documentation to be raised - usually around 7 working days.

Can I race the car?

No. When you Contract Hire a car, you are not permitted to use it for racing, rallying, speed testing or pace making. This usually isn't an issue for most of our customers.

Car insurance

Is my insurance going to go up because I have chosen Contract Hire?

There is no reason to think that your insurance premium will increase because you have contract hired your car.

Is insurance included in the car Contract Hire agreement?

No, you will need to arrange insurance separately.

Can I insure the car under my company insurance?

Yes. If the contract is in your company name, you can insure it under that name.

Is fully comprehensive insurance compulsory when I take out Contract Hire?

Yes. It is a requirement that you fully and comprehensively insure your car for the entire term of the contract.

Can I insure my whole family to drive the car?

The fact that you are contract hiring your car will not affect your ability to add other drivers to your insurance.

If I am in a crash or have an accident do you provide a courtesy car?

If the crash isn't your fault you will usually be able to claim a courtesy car through own insurance, or you may be supplied with a temporary replacement car by the repairing bodyshop.

My new car

Is there a delivery charge?

No. We arrange delivery, free of charge to your address.

What are the colour options?

You can basically choose any colour offered by the car manufacturer but, if you're working to a tight deadline and need a car more quickly, you may want to choose a car from our stock offers (usually delivered within 3 weeks) and then there may be less colour choice.

Is road tax included with Contract Hire if not, how much does it cost?

Yes. Road Tax is included for the full term of the contract.

Can I transfer my private number plates on a Contract Hire car?

It is possible to transfer your private plates onto your Contract Hire car. Most Funders will have processes in place for this and there may be a small charge for the service.

Are there any admin charges involved?

We charge a £125 + VAT arrangement fee. Some finance brokers will charge an admin fee for Contract Hire agreements, which we will talk to you about if it applies.

What are the hidden costs?

Excess mileage and any 'end of contract' damage (over and above 'fair wear and tear' as identified by the BVRLA) will be charged at the end of your contract by the Funder. The Funder may also make a nominal charge to administer any parking or speeding violation fines on your behalf (in addition to the cost of the fine itself).

Is my car coming directly from the manufacturer or a local dealer?

A franchised dealer will deliver your new car to you, though not necessarily one that is local to you. We have negotiated the best rates with manufacturers and certain dealers.

What is the time scale for delivery?

This really depends on the car you choose. As most of our customers tend to opt for our special offer stock cars, we can usually deliver your new car within 3 weeks. If you decide to go for a factory ordered car, these can take longer, typically around 8 weeks.

Part exchange

Do you offer part exchange on any car?

We offer part exchange on cars, vans, pickup trucks and motorbikes. We are unable to take tractors, HGVs or plant and machinery.

Do you need to see my car if I want to part exchange?

Not initially. We will ask you to assess the car's condition so that we can give you a valuation. Obviously payment of this amount will be dependent on the car being 'as described' when we receive it.

Will you still take a car that is in a bad way?

As a minimum, your part exchange will need to have a valid MOT and be legal to drive.