Compare apples with apples
Comparecontracthire.com advises small businesses to ensure they are comparing like for like rentals, when comparing contract hire prices from several suppliers.
Sometimes a headline contract hire rental seems to be good to be true. If you are attracted to a headline rate that looks really attractive, make sure you are comparing “like with like”, if sourcing contract hire prices from several leasing suppliers. Here is a useful checklist from comparecontracthire.com;
-
Are you comparing the exact same model? Look at the manufacturer recommended list price (basic price plus VAT) to make sure it is a current model year. – Non current models may be offered, with different specifications to the one you think you are ordering.
-
What are the payment terms? How many rentals do you have to put down and how many subsequent payments will you have to make? - Bigger initial payments, followed by longer payment periods, will make the headline rental look low.
-
Is there a document fee and if so how much is it? Divide this fee by the total number of rental payments to see how much this adds to the monthly rate.
-
How long is the contract? – Rentals will vary depending on the term and generally the longer the length of contract, the less expensive the rental becomes.
-
What is the annual mileage allowance? – The smaller the allowance, the less your rental will be. If you choose a lower contractual mileage, than your actual mileage, you will get an excess mileage bill when you send the vehicle back.
-
What type of contract hire is being quoted i.e. is it with our without maintenance for example? – Make sure you know what is included in the contract and what is not.
-
Finally are you looking at the rental with or without Vat? – Vat will be added to any contract hire rental and your ability to reclaim this depends on your own company status i.e. Vat registered or not?
If after running through this checklist one supplier stands out, you know you are comparing “apples with apples”.