Contract Hire explained
What is Contract Hire?
Contract Hire, sometimes called personal contract hire, is a rental agreement that enables you to drive a new car without the hassle of ownership. With Škoda Contract Hire, you can make budgeting easier by building servicing, maintenance and tyre plans into your monthly payments.
How much do I pay and when?
With Škoda Contract Hire, you make an initial rental payment – usually equivalent to 3, 6, 9 or 12 months’ worth of payments – followed by fixed monthly payments over a 12- to 48-month term. The amount you pay each month will depend on the car and repayment term you choose. At the end of the repayment term, there is no balloon payment to make, you simply return the car to us.
Once you’ve chosen your Škoda and decided on your initial rental payment you have three more decisions to make. Your choices will determine how much your monthly payments will be.
Your rental period is the term of your agreement. During this time, you’ll be making monthly payments for hire of the car. You can choose any period between 18 and 48 months. The shorter your term of agreement, the higher your monthly payments will be.
Tell us how many miles you expect to drive in the first year. Once this mileage is agreed, bear in mind that fees may apply if you exceed this mileage. This is because there’ll be more wear and tear on the vehicle, reducing its value.
If you wish to change your agreed mileage, this is usually possible once a year, provided you’re not in the first or last 6 months of your agreement. Adjusting your agreed mileage will alter your monthly payments and there may be an admin fee.
With Škoda Contract Hire, you can choose whether to include service, maintenance and tyre plans in your agreement. The benefit of choosing this cover is that you’ll know precisely how much you’ll be paying each month for use of the car. You also enjoy the reassurance that the car is being serviced and maintained by Škoda experts.
At the end of your Contract Hire agreement term, you simply hand your Škoda back, subject to fair wear, all repairs meeting Škoda standards and all payments being made. If you’ve exceeded your agreed mileage, there may be fees to pay.
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What benefits does Contract Hire offer me?
Simplicity
Contract Hire is ideal if you’d like to pay a monthly rental for the car, changing it regularly without the worry of depreciating assets.
No ownership worries
The vehicle remains the property of Škoda so that removes the stress of car ownership. At the end of your agreement, you simply hand the car back.
No final payment
At the end of the agreement, there’s no additional final payment.
Škoda Driverline
To make your life easier, this service gives you a single number for all your motoring needs, from breakdown and recovery to service booking and maintenance enquiries.
Budgeting made easy
If you choose to add service, maintenance and tyre plans to your agreement, you’ll spread costs across the year.
Added benefits for business users:
1. A proportion of the rentals may be claimable as an expense against taxable profits.
2. An element of the VAT on rentals may be recoverable by VAT registered businesses.
Contract Hire FAQs
How Contract Hire works?
Contract Hire, sometimes called personal contract hire, is a rental agreement that enables you to drive a new car without the hassle of ownership. You make an initial rental payment followed by fixed monthly payments over an agreed term. The amount you pay each month will depend on the car you are hiring and the repayment term you choose. At the end of the repayment term, the car is returned.
What’s the difference between Contact Hire and leasing?
Contract Hire is a type of leasing. What makes Contract Hire different is that it’s a long-term rental agreement with no option to own the car at the end of the term.
What’s the difference between Contract Hire and Hire Purchase?
Contract Hire is a long-term rental agreement. At the end of the agreement, you return the car. With Hire Purchase, your monthly payments are instalments towards owning the car outright once the agreement term ends.