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Contract Hire Vs Vehicle Purchase for your business

21st February 2020

van hire Norwich

Never considered contract hire for your business before? When deciding on a new hire vehicle(s) for your business, it is only natural (and sensible) to weigh up the options before committing.

We think contract hire makes perfect business sense, minimising the risk and overheads for your business. 

Should I lease or buy a vehicle?

Contract hire is a cost effective and simple solution to acquiring a business van.

After many years in the hire industry, we think we may have heard every question possible relating to contract hire and what the benefits are of hiring a vehicle on a long-term basis, over buying the vehicle. We have tried to collate as many of them as possible to help you make an informed decision about your company’s fleet.

Whether you are a transport manager tasked with deciding on a new fleet of vehicles, or a one person start up searching for a van to enable you to make a start in business, we hope you will find this useful.

Ultimately whether you should hire or buy a vehicle is a personal choice and should suit your requirements and affordability. Either way it is a big commitment, so of course, it needs to be viable for you and your company.

Is contract hire or buying a car cheaper?

Buying a vehicle for your business can be a costly exercise. In fact for many businesses, running vehicles is one of the biggest overheads they have.

By using contract hire, you can minimise your initial outlay as you don’t need to find the money for your vehicle upfront. It also allows you to plan for your future financial commitment of your business vehicles. 

With cashflow a major factor in the reason many businesses fail in the first year, cutting a large overhead could have an impact on getting your business off of the ground smoothly and successfully.

Will I have to pay for servicing on my business vehicle?

If you or your company own the vehicle outright, yes you will be liable for your servicing and repair costs. How much it will be, depends on the age, usage and often a bit of luck (or lack of it).

With a contract hire or lease van, generally the servicing is covered by the hire company. When you choose to use our contract hire service, for example, we ensure all maintenance and servicing is taken care of by our professional team (excluding damage by hirer), with no nasty surprise bills or additional charges.

What if my van is out of action?

If your van is out of action and you own it, some garages will supply you with a courtesy car. Frustratingly this may not be a vehicle that is fit for purpose within your industry. After all, if you use a large van day today and it is replaced with a garage courtesy car, it may be just as limiting on your day’s work as having no vehicle at all!

We will always provide a replacement van at no extra cost. In planned circumstances such as scheduled services we will always try our utmost to ensure it is a close replacement for your own, minimising any disruption caused. We aim to eradicate the risk of losing earnings and the additional costs associated with securing a temporary van, allowing you to focus on what you do best, your business.

Will I pay for road tax on a contract hire vehicle?

You do still pay for road tax, but it is included within your monthly fee so there is no additional charge for it, and no need to organise it either! We will sort everything on your behalf.

What about when it is time to upgrade my van?

Generally, contract vehicles with us are offered on a 3 year term, although this can be tailored to suit your requirements. At the end of your agreement, you can simply trade for a new version of the same van for a seamless transition or upgrade to a different vehicle or fleet size if your company has expanded.

If you own your vehicle, it is likely that you will need to keep it for longer than 3 years to make it financially viable, as most vehicles lose between 50% and 60% of their value in the first three years of ownership. You will also have the added hassle of listing, selling and replacing your vehicle which can be a time consuming exercise.

Why use Trott Rentals for contract hire?

There are many large leasing companies offering contract hire for vans, but if you are based in Norfolk, we may be the perfect choice for your vehicle hire.

We are experts in our field, we only offer commercial vehicles for hire and have the experience to be able to advise you on the best vehicle, or fleet of vehicles for your needs.

We understand your vehicles are a vital part of your business, so we will always do our best to minimise disruption when it comes to servicing. All work is carried out from our HGV workshops allowing us to provide fleet maintenance solutions, for all types of vehicle servicing from cars to HGVs.

Above all, we offer unrivalled levels of customer support.

Call us today to find out more.

01603 426487