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Business Leasing & Contract Hire

Business contract hire otherwise known as BCH or business leasing is essentially a long-term rental agreement that is a popular option for VAT registered sole traders, partnerships and limited companies as they can reclaim 50% of the VAT back on car agreements and up to 100% on a commercial vehicle.

Contract hire is becoming more popular with businesses for two key reasons, 1. You don’t need to worry about vehicle depreciation and 2. You have fixed monthly costs to lease the vehicle, making business finance easier to manage.

Leasing is available to all financially eligible businesses.

Key features of business leasing

  • The leasing funder is the owner of the vehicle which means vehicles appears ‘off the balance sheet’ of your business
  • Maintenance can be included in your monthly rental, meaning one monthly out going covering your whole vehicle.
  • Flexible finance terms to meet your company requirements
  • If your business is VAT registered you can claim 50% back on the VAT of cars and up to 100% on commercial vehicles
  • The business doesn’t need to worry about deprecating assets

Considerations for Business Leasing

  • At the end of the lease your business will not own the vehicle nor can it purchase the vehicle especially if VAT has been claimed back on the monthly rentals.
  • Early terminations can be expensive
  • Vehicle must be insured with full comprehensive cover
  • If you go over your estimated mileage you will have to a “Pence Per Over Mile” charge, although this is normally between 5-10 pence per over mile, it is worth considering when looking at leasing

What happens at the end of your lease?

At the end of the lease the vehicle is returned to the leasing provider, our renewals and customer services team will help you through this process, but this does mean you are free to start looking at your next car, with no outstanding finance obligation.

Our renewals team will get in contact with you once you are 6 months from the end of your contract.

At the end of the contract the leasing provider will send a representative out to inspect the vehicle prior to collection, it will be assessed in line with the BVRLA fair wear and tear guidelines. Damages that fall outside of the guidelines will be deemed chargeable by the leasing provider. You can visit the fair wear and tear guide here.