Contract Hire, sometimes referred to as an Operating Lease, is a long term rental agreement. Contracts range from 12 to 60 months and are tailored to the businesses requirements.
The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).
On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally 'off balance sheet funding' (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
T: 01522 5000 55
Motor Source Group
PO BOX 1271
Forces Cars Direct Limited TA Motor Source Group are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 672273. We act as a credit broker not a lender. We can introduce you to a limited number of lenders who may be able to offer you finance facilities for your purchase. We will only introduce you to these lenders.
Registered in England & Wales with company number : 03319103 | Data Protection No : Z1702227 | VAT No : 780206054
Registered Office : Tower House, Lucy Tower Street, Lincoln, Lincolnshire, LN1 1XW
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