Personal Contract Hire
| Features of Personal Contract Hire:
- A Hiring Agreement where the vehicle remains the property
of the Finance Company
- The vehicle is disposed of by the Finance Company at
the end of the contract.
- The contract is set for a period usually between 2 &
4 years.
- The contract is for a set mileage usually for a maximum
mileage of 100, 000 petrol engines & 120,000 diesel
engines.
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The customer pays a fixed monthly rental which
will always include:
a) Cost of vehicle funding.
b) Cost of vehicle depreciation.
c) Road Fund License.
For an additional Rental the customer can include the following
options:-
a) All Maintainance, Service, Repairs, Tyres and Batteries.*
b) Relief Vehicle provision.
c) Recovery service.
d) Motor Club Membership.
[ *Accidental damage, driver abuse and glass breakage's are
normally excluded. ]
Advantages
 1. Fixed cost
motoring:-
The
Customer only has to bear the direct costs for fuel
and
vehicle insurance, plus Excess Mileage charges if the
vehicle
exceeds the Terminal Mileage figure.
2. Reduced
Administration.
3. No responsibility
for vehicle disposal.
4. Low initial
outlay.
5. Low monthly
outlay.
6. Finance
charged on VAT exclusive price of new and
qualifying
cars.
Disadvantages
1. No equity
on the vehicle at the end of the contract.
2. VAT on rentals
only 50% of which is reclaimable.
3. Vehicles
do not appear on the balance sheet.
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