Business Contract Hire Explained | Stable Vehicle Contracts
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Business Contract Hire Explained

Business Contract Hire is a popular method to fund a brand new car or van. As it reduces overhead operating costs, improves cash flow and reduces risk.

Business Contract Hire (BCH) is a popular way for businesses and organisations to get a brand new vehicle, be it a car or van. With BCH you lease the vehicle over an agreed period of time, typically 24, 36 and 48 months and with a fixed monthly rental price. BCH is a form of vehicle rental, meaning you do not take ownership of it.

Not taking ownership of the vehicle has several positive aspects. The first is that it reduces overhead costs and allows you to invest more money into the business, instead of a depreciating asset. Another reason is that it improves overall cash flow, as your fixed monthly costs will never change allowing you to budget month on month (MoM) accordingly.

One of the most popular reasons for BCH is the VAT recovery, which can be around 50% on the finance rental for cars and 100% on the maintenance and service areas. It's also fully recoverable for vans.

Most business contracts include maintenance and services packages as part of the cost. This can include brakes, tyres, oil changes and other general maintenance. The great thing about these packages is that they're part of your fixed monthly cost. Therefore the only real expenditure that you have to focus on is fuel and insurance costs. 

A big reason why businesses and organisations prefer BCH is due to them being able to avoid the risk of vehicle depreciation and have fixed interest rates. You can also recover VAT on the costs of the vehicle to further save money and reduce the risk for your business. 

Stable Vehicle Contracts are experts in Business Contract Hire. With our combined sales team experience of over 50+ years and wealth of knowledge in contract hire, we're able to find you the most suitable and cost-effective vehicle for your business needs. Our business contracts ensure that you can focus on the daily running of your business without worrying about the burdens of operating, taxing and financing vehicles for you and your drivers.

And when you're done with the vehicle, you don't even need to worry about disposal, as there will always be someone to collect the vehicle once the contract is up.

Being able to fully concentrate on your business is the peace of mind we believe everyone should have the access to.

Benefits of Business Contract Hire (BCH):

  • Better MoM budgeting due to fixed monthly costs
  • Reduced overhead costs to your business, invest in your business not depreciating assets
  • Fixed interest rates
  • VAT recovery on both cars and vans, including maintenance and services
  • Rentals are offset against taxable income for corporation tax
  • Vehicle disposal headaches are gone
  • Road fund licence provided
  • Fixed maintenance costs
  • No depreciation risk
  • Reduced stress due to less outgoing expenditure besides fuel and insurance

Hopefully, this guide will have answered any questions you have regarding Business Contract Hire. If not, please feel free to call us on 0151 728 4711. If you would like to view our latest Audi and Volkswagen contract hire offers please click here.

This guide is accurate as of 14 March 2022. This article does not constitute advice, it is for information purposes only. You should contact the finance company for personalised advice for your specific circumstances.

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