A Contract Hire /Operating Lease is similar to a Finance Lease. However, it includes an arrangement agreed at the outset whereby the vehicle is returned to the supplying Motor Dealer on completion of the lease term.

The rentals payable by a business during the term of the lease are usually lower than those payable under a Finance Lease, because the value of the vehicle at the end of the term is guaranteed. Rentals payable take into consideration this guaranteed value. Similar to a Finance Lease, the rentals payable are of course allowable against tax (subject to current legislation). Contract Hire /Operating Lease is suitable for most vehicles including cars, delivery vans, trucks etc.

Benefits of Contract Hire/Operating Lease

Under this type of finance agreement the customer can derive benefit both from a financial and an operating perspective.

The Financial features of such an agreement include:

The possibility of achieving 'Off Balance Sheet' status of the financing arrangement with a resultant gearing enhancement and improved return on capital employed Fixed rentals allow accurate budgeting and forecasting and are a protection against interest rate fluctuations Lease rentals are deductible for tax purposes (subject to current legislation) Vehicle maintenance can be included in the Lease Contract, thereby greatly simplifying budgeting and fleet running costs For more information, please contact us on 0191 488 8445 or use this email link. office@hrcgroup.net