Contract Hire
Contract hire offered by Anglo is a means of acquiring vehicles / goods / equipment through renting the asset for a fixed period. The contract hire agreement does not entail ownership of the asset. The asset remains the property of the Contract Hire Company who take the risks associated with it’s future value based on past experiences with financing similar equipment. The advantage to the hirer is that this allows them to hire the asset at a lower monthly rental, rather than having to pay the full capital cost over a fixed term. For further ease of use, the agreement may also include maintenance and other ancillary vehicle/asset management services.
Specific Benefits
- Rentals may be lower than Hire Purchase or Finance Lease instalments as they can reflect the effect of the Contract Hire Company claiming capital allowances, and only depreciation is amortised.
- The goods are acquired for a fixed period at a fixed rate. The predictable payments allow the customer to protect against inflation and control costs, for the duration of the contract.
- The costs may be further fixed by the provision, in the contract, of maintenance and other fleet management services, i.e. vehicle recovery, replacement vehicle (while the goods are ‘off the road’), etc.
- Cash flow is improved when compared to a hire purchase facility, as the VAT treatment of a Contract Hire agreement is based on the net rental amounts as and when they fall due for payment.
- The Contract Hire company can sometimes secure greater discounts on the goods/equipment due to bulk purchasing power, than would otherwise be achieved by the customer on their own account, leading to a reduction in rental costs to the customer.
Benefits
- As with all finance options, the contract hire agreement will give a known term and fixed payments, and capital is conserved for more profitable use elsewhere.
- Cash flow can be managed by tailoring the financial product to the customer requirements and the granting of specific finance preserves the customer borrowing ability by giving an additional line of credit.
For more information and to contact us click here or call 0870 763 0202
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