Exclusively for business users contract hire can be one of the most tax efficient ways of running a new car, your monthly rentals are fixed for the term (based on an agreed annual mileage) and can include routine maintenance along with your annual road fund licence (RFL).
For VAT registered companies 50% of the VAT on the basic rental can be recovered and up to 100% of the VAT can be recovered on the maintenance element of the rental.
At the end of the contract the vehicle is handed back and any excess mileage (only if you exceed the agreed mileage) is charged, typically between 0.7 and 0.12 pence per mile.
12 – 48 month contracts are available, subject to status, on any new car with deposit’s starting as low as the equivalent of only the one monthly rental.
Please take a look at the example below;
Brand New Mercedes-Benz CLS DIESEL COUPE CLS 220 BlueTEC AMG Line 4dr 7G-Tronic
Monthly rental of £349.99
Initial deposit of £1049.97
For business users only. Rental profile 3 + 23. Annual mileage 10,000. All prices quoted are subject to VAT.