It is an agreement between the business or personal user and the leasing or contract hire finance company, all leasing and contract hire agreements are subject to a credit search.
There are lots of finance options to choose from with contract hire being the most popular.
One of the main reasons contract hire is so desirable is that you can change your car or van for a new one without the large outlay of a big deposit. Most ‘deposits’ or ‘initial payments’ can be as little as 1 month’s payment.
You state your expected annual mileage at the onset, the contract hire company then work out the expected ‘residual’ value of the car or van at the end of the agreement, (basically what they think they can sell the car or van for with the age and mileage at the end of the contract) this ‘selling price’ is then deducted from ‘purchase price’ this difference, along with their profit/admin charges is added together, then divided by the amount of months the contract hire agreement is to run and hey, presto, your monthly contract hire payments have been calculated.
At the end of the contract hire period you don’t have the worry about selling the car or van you simply hand it back to the contract hire company.
Should you wish to end the agreement early you would normally pay up to 50% of outstanding rentals and hand the car or van back, Make sure you check the T&C’s of the contract, because you can sometimes ‘swap’ these contracts to someone else – assuming the contract hire company agrees!
You can see why contract hire is such an appealing method of funding and changing your car or van on a regular basis.
Compare contract hire and leasing quotes at www.leasebid.co.uk Compare Contract Hire Offers
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