FINANCING LEASEHIRE, CONTRACT HIRE & PCP SCHEMES

Wondering About The Best Way To Finance Your Next Car? Jonathan Crouch Offers A Brief Guide Through The Complexities Of Contract Hire And PCP Financing

Financing your personal or company vehicle has apparently never been easier, though the sheer number of different approaches you can now take tend to often leave the opposite impression. Though there are a large number of alternative solutions, many people tend to end up with the three favourites, contract hire, contract purchase and Personal Contract Purchase, which all provide a very different range of options.



Contract hire



Contract hire offers most of the benefits of ownership without the hassle. You effectively hire the car for a fixed period - three years/60,000 miles or four years/80,000 miles are common - but the duration and mileage limits can usually be varied to suit your needs. You pay a fixed monthly fee and, at the end of the contract, hand the car back to the contract hire company with nothing to pay (provided it meets the mileage and condition criteria agreed at the start of the contract).



You can also reclaim 50 per cent of the VAT on the finance element of the contract. Most of the fleet management can be handled by the fleet provider and the funding isn't shown as an asset on the balance sheet, which...