Car Contract Hire Explained by Silverstone Leasing

At Silverstone Leasing, we aim to offer comprehensive solutions for your vehicle needs. One of the primary services we provide is car contract hire, a popular and advantageous alternative to purchasing a vehicle outright. This article will explain the concept of car contract hire, its benefits, potential drawbacks, and the steps involved in obtaining a car lease from us.

what is car contract hire

What is Car Contract Hire?

Car Contract Hire, a long-term rental agreement, allows you to use a car for a specified period while making fixed monthly payments. This arrangement typically spans between two to five years. At the end of the term, you return the vehicle to us, freeing you from the hassle of reselling and dealing with depreciation.

Contrasting with purchasing a vehicle, where you pay in full or take a loan to own the car, car contract hire eliminates the option of ownership, distinguishing it from other finance methods such as Hire Purchase (HP) and Personal Contract Purchase (PCP).

Why Choose Car Contract Hire from Silverstone Leasing?

Predictable and Manageable Costs

Car contract hire lets you know precisely what you will pay each month. This clarity facilitates easier budgeting compared to other finance methods. Also, the monthly payments tend to be lower than car loan repayments since you only pay for the vehicle's depreciation during the lease term, not its full value.

Drive Newer Models

Silverstone Leasing offers a wide range of vehicles, often enabling you to drive a newer model than you could afford to buy outright. As these vehicles are new, they are usually more fuel-efficient and come with the latest safety features. Furthermore, you can expect minimal maintenance costs since the lease term usually aligns with the manufacturer's warranty period.

No Resale Worries

With our car contract hire service, there is no need to worry about selling the vehicle or its depreciated value. Simply return the car to us at the end of the lease term.

Considerations for Car Contract Hire

Mileage Restrictions

Our lease contracts come with an agreed mileage limit. Estimating your annual mileage correctly is essential, as exceeding the limit could incur additional charges.

Early Termination Charges

Deciding to end the lease before the term completion may result in early termination fees.

No Ownership

Bear in mind that with a lease, you never own the vehicle. You might want to consider other finance options if vehicle ownership is essential.

The Silverstone Leasing Contract Hire Process

1. Choose Your Vehicle

Select the car that suits your needs and preferences from our extensive range. Our team at Silverstone Leasing can assist you in making an informed choice.

2. Define Your Lease Terms

Decide on the lease duration and your annual mileage. These factors influence your monthly payments, so assessing your needs is crucial.

3. Apply for a Lease

After determining your vehicle and lease terms, the next step is to apply for a lease. We conduct a credit check to ascertain your financial stability.

4. Initial Rental Payment

Once your application is approved, an initial rental payment is required, usually equivalent to one, three, or six monthly payments.

5. Regular Monthly Payments

Following the receipt of your vehicle, you are obliged to make regular monthly payments for the duration of the lease term.

6. Return the Vehicle

When the lease term concludes, return the vehicle to Silverstone Leasing. To avoid any end-of-lease charges, ensure the car is returned in good condition, considering normal wear and tear.

Tips for a Successful Car Contract Hire with Silverstone Leasing

In Conclusion

Car contract hire offers a range of benefits for individuals and businesses alike, including predictable monthly costs, access to newer vehicle models, and the absence of resale concerns. However, it's also essential to be aware of potential drawbacks, such as mileage limitations and the lack of vehicle ownership.

Silverstone Leasing is committed to providing transparent, flexible, and customer-oriented car contract hire services. Our team is always ready to help you understand the contract hire process, choose the best vehicle for your needs, and ensure a smooth, worry-free leasing experience.

Whether you're considering car contract hire for the first time or an experienced lessee, we invite you to explore our extensive range of vehicles and discover the benefits of leasing with Silverstone Leasing. Contact us today to learn more about our services and how we can assist you with your car contract hire needs.

What is Contract Hire on a Car?

Contract hire on a car, often referred to as car leasing, is a type of long-term rental agreement. In this arrangement, a customer enters into a contract with a leasing company to use a specific vehicle for a predetermined period, typically between two to five years. The customer agrees to make regular monthly payments for the duration of the contract. At the end of the agreement, the vehicle is returned to the leasing company. This means the user benefits from the use of the car but doesn't have to worry about the eventual resale or depreciation of the vehicle.

What is Car Contract Hire vs Lease?

The terms 'car contract hire' and 'lease' are often used interchangeably in vehicle finance. Both refer to an agreement where you pay a monthly fee to use a vehicle for a specified period. However, subtle differences can occur depending on the type of lease agreement.

There are different car leasing options, such as Personal Contract Hire (PCH) and Personal Contract Purchase (PCP). In a PCH (similar to contract hire), you return the vehicle to the leasing company at the end of the lease period. On the other hand, a PCP lease allows you to purchase the car at the end of the lease term for a predetermined 'balloon payment'.

So, in a broader sense, car contract hire is a type of car lease. The difference lies in the details of the specific lease agreement.

Is Contract Hire Better?

Whether contract hire is a better option depends mainly on individual circumstances and requirements. It can be a preferable choice for those who like to drive a new car every few years, desire predictable monthly payments, and want to avoid the hassles of selling a used car.

Contract hire allows you to access newer, often higher-spec vehicles that might be otherwise unaffordable if purchased outright. It also relieves you from concerns about the vehicle's depreciation and the challenges of selling it at the end of the use period.

However, contract hire may not suit everyone. Those who prefer to own a vehicle outright, drive significantly high mileage, or want to customize their car might find contract hire less favourable. There are also potential charges for excess mileage and damage beyond normal wear and tear.

Who Owns a Contract Hire Car?

In a contract hire arrangement, the leasing company retains vehicle ownership. The customer essentially rents the car for the duration of the contract and must return it at the end of the lease term. This is one of the primary differences between contract hire and other finance options like a hire purchase or a personal contract purchase, where there's an option for the customer to own the vehicle at the end of the agreement. In a contract hire scenario, there's no option for the customer to buy the car; ownership always remains with the leasing company.