Contract hire enables you to have a vehicle of your choice on rental basis, usually for a period of 12 to 48 months. Typically, the vehicle is leased for about 3 year’s duration. The company supplying the vehicle calculates the monthly rental value payable by the lessee and takes deposit amount usually equivalent to three months rental value. Lessee prefers this arrangement as they do not have to incur the high costs of maintenance, funding costs and depreciation, but only have to pay the nominal monthly rental.
Advantages of contract hire:
1. You do not have to pay an exorbitant amount of money car lease, unlike when you make a purchase.
2. You remain unaffected by the depreciating value of the vehicle. Any fluctuations in its prevailing market rate will not affect you.
3. If you are someone who likes changing cars frequently, then contract hire is the ideal platform for you to rent and drive new cars over a span of 1-3 years.
4. You do not have to worry about the maintenance of the car.
If you have always dreamt of having a car, but your limited means never allowed you to make the purchase, then contract hire is the method which will make your dream come true. In present times, having your own vehicle is more of a necessity rather than a luxury. It is difficult to imagine a daily routine without having a car. Imagine what would you do in the case of an emergency? If someone in your family is critical and needs to be immediately hospitalised, and you don’t have your own vehicle, then the delay caused in arrival of ambulance could be crucial.
Following points are helpful in understanding how contract hire works:
1. Search for the right deal: Internet is the best source to locate various companies offering cars on contract hire basis.
2. Discuss your requirements: Discuss about the kind of a car you are looking for; hatchback, SUV or a high end luxury model, duration for which you plan to use it, contract fees and usage terms.
3. Payment plans: Different companies use different payment plans in order to maintain a competitive edge over the other. Payment plans are usually segment specific, i.e. cars falling in a particular segment will have similar payment plans. It also differs with respect to late returning of the vehicle, over limit of mileage usage and damage caused during the lease period.
4. Compare: Get different quotes from various companies to see what suits you the most and proceed with the company that is offering you the best deal.
Contract hire offers various benefits which makes it a preferred choice not only for individuals who wish to procure a car for personal use, but also for businesses who want to have a vehicle for business purpose.
Summary- Contract hire enables you to have a vehicle on payment of monthly rentals for a fixed duration of time. To get a vehicle through contract hire, search for the right deal, discuss your requirements with the company, see various payment plans which are offered and compare quotes given by various companies before choosing the one that suits your requirements the best.
By guest blogger Atul