Contract Hire

A method of running a car aimed at companies and individuals who are VAT-registered. Rather than owning the car outright, the vehicle is leased from the contract-hire supplier over a specified number of years - usually between 2 and 4.

After this period, the vehicle is simply returned with no further commitment or a deal for a new car is agreed. Most contract-hire deals include servicing and maintenance; the only additional costs are insurance and fuel.

See also Leasing.