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Van Business Contract Hire

What Is Van Contract Hire?

Under this kind of lease agreement, you drive the vehicle for a set period of time (usually 2-5 years) on a predetermined annual mileage limit fixed & for fixed monthly rentals. You never own the vehicle & at the end of the contract the van is returned to the finance company.

The size of your monthly rentals will depend on the value of the vehicle, the length of the contract & the agreed mileage. You can also include a maintenance package in your monthly rentals which will help pay routine maintenance, servicing, tyres & other wearables.

Pros & Cons Of Contract Hire Van Leasing


  • Low deposit 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 up-front costs, freeing up money for you to invest elsewhere in your business
  • No risk - The risk of vehicle depreciation 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 100% of the VAT on all maintenance charges, the lease rental the fees and finance element for commercial vehicles
  • Rentals are up to 100% 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
  • Maintenance can be included


  • You will need to estimate the time and mileage for the use of the vehicle
  • 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 vehicles 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'


Why Choose Contract Hire For Vans

  • Contract Hire is ideal for customers who want to drive a brand-new van without having to worry about disposing of it at the end of the contract.
  • There is no risk of negative equity because you won't own the vehicle.
  • A vehicle leased under Contract Hire will not show up on your balance sheet - perfect if you want controlled cash flow.
  • A maintenance package can be included, which covers routine maintenance.You will pay a low initial rental (a minimum of 1 month's rental) with no large final balloon payment.
  • Vehicles are returned to the finance company at the end of the contract meaning you can upgrade to a new one hassle-free.

Van Contract Hire FAQs

When deciding on a van financing option, it's important to have all the information you need to make the right choice for you & your business. We've put together a comprehensive collection of contract hire FAQs to help you find out more.

Finance and Application

Is contract hire available on all your vans?

Yes, you can choose between contract hire & finance lease on any of our commercial vehicles. Take a look at our latest van leasing deals to see which brand-new, in-stock vans are available.

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

We take a refundable (less our administration fee of £198+VAT) Vehicle Reservation Fee of £500 per vehicle upon order. This is to secure the vehicle & will be returned to you upon delivery (minus any fees where applicable). This is also fully refundable even if you decide to cancel your order before delivery.

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

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

  • Name, address, landline number

  • Company name & company registration number (if a limited company)

  • Address history for the last 5 years

  • Number of years trading/ownership

  • Director details

  • Bank details

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

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 & 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 will try to get an answer for you within 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' (which does not record the outcome of the credit check) 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 & some can be more pragmatic than others. There are no guarantees, but we will always try to match you with the most appropriate Funder; sometimes this can mean we offer you a different product, such as Contract Purchase.

Do you use various finance companies?

Vanarama is a consumer credit and personal credit broker authorised and regulated by the Financial Conduct Authority, not a lender. This means we have access to all the top vehicle finance companies in the country & the amount of business we do with them means that we (and you) can enjoy the very best rates.

Do I have to be VAT registered?

Certain funders may 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 up to 100% of the VAT back.

Can I claim the VAT back on van Contract Hire payments?

If you're VAT registered, you can claim back up to 100% of the VAT from your monthly rentals.

Are there any mileage limits on contract hire vans?

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.

Can I extend the van Contract Hire agreement?

The shortest term available for contract hire is 24 months. The length of your contract impacts your monthly fixed cost and initial payment.

Do I have the option to keep my van at the end of the agreement?

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

What's Included?

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 vehicle. 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 van out on Contract Hire?

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

What happens if there are dents & scratches on the vehicle when I return it?

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

Is insurance included in the van Contract Hire agreement?

It's not, but we can provide you with competitive van insurance deals.

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

Your insurance premium will not increase because you have leased a vehicle on a Contract Hire agreement.

Can I customise the van?

You can generally customise the van, provided the changes you make are legal. You cannot lower a van. Tinted windows would be permitted so long as the law was complied with, i.e. it is not legal to tint front windows. 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 sometimes opt to pay for them separately.

Explore our other finance options or take look at our latest van lease offers.