Business Contract Hire - Frequently Asked Questions
Please find some frequently asked questions below from our customers about Business Contract Hire, that you may find useful and helpful.
Q: What makes and models of vehicles can you supply?
We can supply all makes and models of brand new cars and light commercial vehicles that are available in the UK. We also work with multiple brand dealerships, increasing the chances that we can locate and supply "in-stock" vehicles.
Q: What type of businesses can have Business Contract Hire?
You must be a Sole Trader, Partnership, LLP, Limited Company or PLC.
To be considered for finance approval, you may need to be able to provide copy business bank statements and/or annual accounts. Some leasing companies may require a minimum of two years filed accounts.
If your business is new and you are unable to do this, you may be able to lease a vehicle on a personal basis instead.
Q: How long is the contract hire term?
Lease contracts typically range from 2 years to 4 years, depending on the vehicle and mileage contract required.
5 year lease contracts are sometimes offered, depending on the customer and the leasing company.
Shorter contracts mean that you are changing your vehicle more often, but can be more expensive. Longer contracts will normally result in cheaper monthly rentals, however this will also require MOT testing of the vehicle and possible expiry of the manufacturer new vehicle warranty.
Q: Will my contract include Servicing, Maintenance and Tyres?
Full Maintenance and Tyres option can be added at an additional cost. It includes all scheduled servicing, necessary maintenance, tyres, brakes, exhaust, battery and MOT of your vehicle, plus any required labour costs.
It will not cover any damage or misuse to the vehicle.
Q: What happens when a vehicle needs servicing or repairs?
If you added the optional Maintenance package to your agreement, you will receive a Driver Helpline or Vehicle Maintenance contact number from the leasing company. If your vehicle needs to be serviced or repaired simply call that number to be booked into a local approved garage. You may also be able to request free collection and delivery, or a courtesy car.
If you have not included a maintenance package, you are advised to use a local franchise dealer and only use approved parts. Please refer to your contract hire agreement paperwork, this will tell you what you need to do, and what the leasing company requirements are.
Q: Will my contract include Insurance?
Insurance is not included. This is because the costs of insurance can vary dramatically between companies and drivers, so it is impossible to accurately calculate the costs within the monthly lease rentals.
When you are searching for vehicle insurance quotes for a leased vehicle, you will need to confirm that you are NOT the registered keeper or legal owner of the vehicle, and provide further details about the leasing company.
Q: Will my contract include Road Fund Licence?
Your contract hire agreement will include Road Fund Licence (Vehicle Excise Duty) for the duration of the contract.
Please be aware that if the government increases Road Fund Licence during the term of the agreement, you may be liable to pay the amount of the increase.
Q: Will my contract include Breakdown & Recovery Cover?
Contracts for all vehicles include either 1 year or 3 years breakdown cover, depending on the manufacturer. The breakdown company that provides this service will also depend on the manufacturer that supplies the vehicle.
If you decide to add optional Full Maintenance to the contract, this can typically include Breadown cover for the full contract term.
Q: Do you charge an adminstration or processing fee?
We charge a separate processing fee of £166.66 +VAT per vehicle
Q: Can I part exchange my current vehicle?
The leasing companies do not have the facility to purchase your current vehicle. However, we can help to find companies or dealers who will offer a "trade" purchase price for your current vehicle.
Q: What is the Initial Rental and when does it have to be paid?
The Initial Rental is an advanced rental, usually equivalent to 3 x, 6 x, 9 x or 12 x monthly rentals. This is typically paid to the leasing company approximately 7 to 14 days after delivery, by direct debit. Sometimes this may be required to be paid in advance of delivery.
The Initial Rental forms part of the lease agreement and is non-refundable.
Q: Can I terminate my agreement early?
Contract hire agreements are not designed to be ended early.
Early termination is at the discretion of the leasing company. An early termination settlement figure is usually between 50% to 100% of any outstanding rentals left. This calculation will vary between leasing companies.
Q: What happens if the agreed contract mileage is exceeded?
Any mileage that is over the lease contract amount is charged at the originally agreed excess mileage rate per mile.
For example: if the excess mileage rate stated in your agreement is 10 pence per mile +VAT, and you exceeded your contract mileage by 1,000 miles, you would therefore be charged £100 +VAT.
You may wish to consider amending your mileage contract to suit. Your mileage contract cannot be changed until after the first 12 months, or within the last 6 months of your lease.
There are two types of business contract hire agreements available. "Non-Regulated" (for Limited Companies, LLP and PLC), and "Regulated" (for Sole Traders and Partnerships). Contract amendments, such as changing the mileage allowance, can only be carried out for Non-Regulated agreements.
Q: Can I put a private registration plate onto a leased vehicle?
You may add a private (cherished) plate onto a leased vehicle with the funder's permission.
The leasing company will have to administer this process for you, as they are usually the registered keeper of the vehicle. They may charge you an administration fee for doing this.
At the end of the contract, you will need to allow sufficient time for the private plate to be removed from the vehicle, before it can be collected by the leasing company.