Fleet FAQ

What is Contract Hire?
Sometimes referred to as an Operating Lease or Full Service Lease, as a business you lease the vehicle (the vehicle is owned by the contract hire company - Ford Lease) for a fixed period, at a predetermined monthly payment - based on a mileage that you will not exceed by the end of the contract. Ford Lease is referred to as the Lessor as a business user you are the Lessee. At the end of the contract, you return the vehicle to Business Partner.

What is included in the monthly payment?
The monthly payment (often referred to as monthly rental) includes the use of the vehicle and an optional Service Maintenance and Repair (SMR) provision. Your business pays the normal rental for the use of the vehicle and pays an additional payment on top if they require the SMR element. Optional services, such as replacement vehicle and recovery services, can also be added into the monthly rental if required by you.

How does it differ from normal HP for instance?
With a Hire Purchase type loan, as a business you have the option of becoming the legal owner of the vehicle once you have made all the payments etc. Contract Hire works differently as you are not being charged for the vehicle's value at the end of the contract - you are giving the vehicle back to Ford Lease rather than paying for the value of the vehicle at that point in time.

What about the VAT?
Contract Hire rentals are based on the Pre-VAT price of the vehicle; however, the monthly rentals attract VAT at the prevailing rate. 
Can the VAT be claimed back? It is always best to refer to your accountant or adviser; however, there are some special rules regarding the VAT deduction of lease rentals on cars: