What is business contract hire?
Business Contract Hire (BCH) is a long-term vehicle lease hire agreement of two to four years, suitable for sole traders, partnerships, and limited companies who don’t want to own the vehicle.
It is a popular option with VAT registered companies as they can claim back 50% of the VAT on vehicle payments (100% for vans) and 100% of the VAT on maintenance costs.
With Business Contract Hire, a company pays fixed monthly rentals for an agreed period (usually 24 to 48 months) for the use of a vehicle.
At the end of the agreement, the vehicle is returned to the finance provider, leaving them to worry about depreciation values and the disposal of the vehicle.
Contract hire allows a business to concentrate on its core activities while avoiding the financial risk and administrative burden of owning a vehicle or fleet.