The benefits of contract hire for the individual

Owning a car is expensive and comes with many responsibilities. Your first and biggest expense will be the actual purchase of a car. Even a second-hand car can be expensive and buying outright is not an option for most people. Once you’ve bought the car, you have to pay for fuel, insurance, road tax, MOTs, servicing and general maintenance. Contract hire of cars provides a more flexible and cheaper alternative.

Personal contract hire, as it is known, is essentially the same as contract hire, but for private individuals. If you want fixed cost motoring, or have opted out of a company car scheme, then personal contract hire could provide you with hassle-free motoring without the residual risks associated with traditional ownership.

For the private individual, contract hire is an attractive option and if you’ve never considered it, perhaps you should. If you need persuading, have a look at the points below:

• Fixed cost motoring – The greatest advantage of contract car hire has to be that you have a much clearer idea of what you car is going to cost you to run on a monthly basis. All you have to pay for on top of the monthly rental are the direct costs of fuel and vehicle insurance, plus excess mileage charges if the vehicle exceeds the terminal mileage figure, which will have been agreed in your contract.
• Reduced administration – This is largely taken car of by the leasing company; you will have a minimal number of documents to fill out during the period of hire
• No responsibility for vehicle disposal – When you have finished with your contract hire car, you can just give it back and walk away, or you can swap it for another vehicle. Either way, unlike a car you actually own, you don’t have the hassle of disposing of your contract hire car
• Low initial outlay – The way contract hire normally works is that you will put down a deposit for the car, but you won’t be paying out the large amount of money that the purchase of a new car demands
• Low monthly outlay – Your contract hire fixed monthly rental will include the cost of vehicle funding, cost of vehicle depreciation, and road fund license