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Contract hire offers most of the benefits of ownership without the
hassle.
In essence, it is like hiring a car but over a longer period and is a very popular
choice for VAT registered businesses as this is a VAT beneficial finance
package, one regular payment covers all cost for an agreed period
and mileage.
You pay a fixed amount every month for an agreed term which should usually
cover the cost of the vehicle to an agreed mileage threshold and Vehicle
Excise Duty (Road Fund License).
If you wish, you can incorporate maintenance & servicing in this rental.
You would normally pay a deposit equal to one or three months rentals VAT
is due on rentals and deposit, but may be partially or fully reclaimable depending
on your circumstances.
The finance company is responsible for the disposal of the vehicle at the
end of the contract and you do not have the right to purchase the vehicle,
however you can extend the hire if you wish.
There is an excess mileage charge which is agreed at the start of the contract,
charged at a pence per excess mile rate for every mile over the
agreed contract mileage.
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