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What is contract hire with maintenance?

If you think a maintenance contract is just an expensive way to pay for servicing, think again explains Central Contracts
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Servicing - part of the deal

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24 March 2016

WHEN you are searching for a new contract hire and leasing figure for your next business car, you are quite likely to see the option to add maintenance.

Naturally, the first reaction is to go for the cheapest option – and ignore this extra box to tick. Well, you would wouldn’t you?

But wait – do those immediate savings translate into long term savings? And what exactly is maintenance anyway? Isn’t it just getting the car serviced?

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Well, no.

For a fixed monthly amount, most contract hire companies will offer in addition to their funding agreement: full cover for routine servicing, tyre and exhaust replacement.

This provides complete cover and peace of mind for any additional repairs that may be required. In addition, the full amount of VAT can be recovered on the maintenance element of your contract hire and maintenance agreement. So if you one of your drivers needs new tyres, they just arrange it with the car leasing company’s preferred suppliers and the car gets new tyres. Simple.

It’s easy to see why a maintenance contract is considered by many as simplay an extra cost; however, there are many advantages to fixing the cost of what can be an unpredictable overhead.

So, what are the key benefits of a contract hire with maintenance contract?

  • Insulation from unforeseen running cost spikes
  • All maintenance payments are 100% VAT reclaimable
  • Vehicle can be serviced virtually anywhere in the UK
  • Benefit from contract hire company’s national buying power
  • All vehicles are serviced at recommended intervals
  • Premium brand tyres are always fitted by approved suppliers…
  • …with tyre replacement normally unlimited
  • Breakdown & roadside recovery service is also normally included

The other thing to consider is that, in the event of any major mechanical failure you enjoy the full support of the contract hire company when dealing with the manufacturer. This can be invaluable as the contract hire company generally has a much closer relationship with the manufacturer and also wields a bigger stick than you!

In short the addition of a maintenance contract, particularly for the higher mileage contract, can prove to be a wise investment while simultaneously removing a major source of stress and worry.

More on Contract hire and maintenance

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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