Comparing contract hire prices? Here is a useful checklist to use.
Friday, December 31st, 2010If you are trawling the Internet, researching and comparing contract hire prices on loads of sites, it is always sensible to make sure you are comparing prices on a like for like basis. You may see a really cheap contract hire “headline rental” that looks too good to be true and there are many ways that other companies may manipulate the rental of the vehicle they are offering you, to do this.
Below is a useful Contract Hire Checklist which should help you compare prices on a like for like basis.
| Checklist | Have you checked this?
|
| Are you comparing on 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 (old stock) may be offered to you, with different specifications or body shape to the vehicle you think you are ordering. |
|
| What are the payment terms being offered?
How many rentals do you have to put down and how many subsequent payments will you have to make? Bigger initial payments (i.e. six months in advance), followed by longer payment periods, will make the headline rental look much lower than it actually is. |
|
| Is there a document fee upfront 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 contract hire rental. |
|
| How long is the contract for?
Contract Hire 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 being offered?
The smaller the annual mileage allowance provided the less your contact hire 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 or without full maintenance for example?
Make sure you know what is included in the contract and what is not included. |
|
| 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 you are a private individual and opting for personal contract hire you should be looking at the rental including the VAT.
VAT is also rising to 20% on the 4th January 2011 |










