Contract Hire
Hiring a vehicle for a specific length of time with a specified mileage allowance at a set rate is known as contract hire. The duration of contract hire is typically two years or longer. Under a contract hire agreement, you must return the vehicle to us at the conclusion of the agreement terms.
Key considerations for contract vehicle hire
- When you hire a vehicle through a contract, you'll pay an upfront payment, followed by smaller monthly payments.
- You'll usually have to provide your own maintenance (unless you opt for a package with your rental provider, of course).
- Typically, you'll have to arrange your insurance - though there are some exceptions.
Contract hire is ultimately a great option for businesses that don't mind a longer commitment and may want a specific vehicle for a fixed time period
Contract commercial vehicle hire: the pros and cons
Contract hire allows businesses to hire the vehicle they want for a specified period of time.
While the lack of flexibility could be seen as a disadvantage - not all businesses will require, or be suitable for, flexible hire contracts.
Another great advantage of contract commercial vehicle hire is that it allows your business to concentrate on its core activities without the financial risk and admin burden of purchasing vehicles outright - all while having more control over your hired vehicle.
However, there are some disadvantages.
- Additional costs
Significant damage or wear and tear to your vehicles could lead to additional charges. Additionally, because of your agreed contract, returning the vehicle before the agreed date will more than likely incur additional charges. - Long term commitment required
The clue's in the name - "contract" means you have to stick to an agreement. Unlike flexible hire, you won't have the freedom to end the lease at short notice. In times of uncertainty (where perhaps you no longer require the vehicle), it's important to remember that you'll still have to continue paying for the contract.
Contract hire provides the flexibility for our customers to include within the specification ancillary equipment with special features such as cycle safety systems, audible alarms, CCTV cameras, or Fiveways patented digital display technology, which can provide added value for your own clients.
Overall, contract hire can be a great option if you require the stability of fixed costs that help you plan for the future without the financial risk and burden of purchasing. Ultimately, it's whatever works best for your business. But if you'd like a bit more freedom, it may be worth considering a spot hire option.
Our in-house experts will happily assist in putting together a bespoke tailor-made package.