December 05, 2016

Contract Hire – Vanman’s guide


At Vanman we have different options available for financing your new van, it can be difficult and stressful to decide which option to choose. Contract Hire is a popular option, so what exactly is van contract hire? And is it the best way for you to finance your new van?

Contract Hire – How does it work?

Contract Hire is a highly common form of van finance in today’s market and is essentially long-term van rental. Terms range between 24 and 60 months and at the end of the agreement you give the van back, sounds simple enough, right? At the start of the contract you pay an initial rental (minimum of 3 monthly rentals, however can be more to bring monthly price down), followed by monthly payments for the remainder of the agreement. If owning the van at the end of your agreement isn’t a priority, then contract hire may be for you.

Contract Hire benefits

There are a number of benefits of using contract hire from Vanman to finance your new van. Firstly, you avoid the need to sell the van at the end of the contract as you do with van leasing, you also avoid the financial risk connected with residual value of the van when you own it. If you are VAT registered, VAT costs on top of monthly rentals can be claimed back and the van also doesn’t appear on your company balance sheet.

With contract hire you’re always going to get a new van, you cannot drive a van that is older than the term of the contract, giving you a more modern and reliable van, which also exudes a positive image for your business. Contract Hire is also available with maintenance at extra monthly cost, so any changes to brakes, tyres are already covered, along with servicing. This option could well save you money in the long run.

Benefits do not end there, all contract hire deals from Vanman come with a full manufacturer’s warranty and first year’s road fund licence and roadside assistance! You won’t be hit with a substantial delivery charge either, all Vanman deals come with free UK wide delivery! With maintained deals, road fund licence and roadside assistance and covered for the whole of your contract term.

 

Contract Hire restrictions

There are however some restrictions you have to abide by when taking out a contract hire deal, most notably in the area of ‘wear and tear’ and what the finance company deems acceptable. This can include: chips, dents, accidental damage, scratches, tyres, interior and mechanical condition of the van, you are required to hand the van back close to its original condition, if this is not the case then you may have to pay repair costs. More strict mileage restrictions also apply on contract hire deals, you specify your mileage at the start of the contract and if you exceed this mileage then you will incur a fee.

Are you eligible?

If you’re looking for a new contract hire agreement from Vanman, finance companies will examine whether you meet certain criteria. You’ll be required to show evidence of factors including: 3 years address history, UK residency, full UK driving license and one item successfully completed on credit in the previous three years. When applying for a new van on finance from Vanman, the finance company will conduct a full credit check.