One of the major benefits of contract hiring your next car is you can drive a more expensive vehicle yet you may pay less for your contract hire rental.

Each contract leasing company will have their own way of calculating their rental for a particular vehicle.

The biggest factor in what rental they set is how much the car costs and how much they think they can sell it for, at the end of the contract.

An example of some of the things that can be included in a contract hire rental is shown below.

What this means is that sometimes a car that actually costs more to buy outright will actually cost less per month on a contract hire rental.

This applies to any manufacturer, make or model and to demonstrate this have a look at the example below. 

 

Average rental elements

Rentals have been taken off Comparecontracthire.com and are based on the following parameters, as at the 18th February 2009;

• Maintained contract hire on a three year contract at 10,000 miles per annum.
• Payment terms are three rentals in advance followed by 35 subsequent payments.
• Rentals shown are shown with and without VAT

Model   Manufacturer   Rental   Rental
 
 
 
    list price   excluding VAT   including VAT
 
 
 
BMW 1 Series Hatchback   £18,625   £286.19   £329.12
 
 
 
116i SE 5 Door Dynamic            
 
 
 
BMW 1 Series Hatchback   £16,850   £298.34   £343.09
 
 
 
116i 3 Door Dynamic            
 

As you can see the more expensive BMW is £12 per month less expensive (without VAT) yet the difference in manufacturer list price (basic price plus VAT) is £1775.

This is because one leasing company has potentially purchased the vehicle on more favourable terms and has set a better re-sale value.

This principle will apply to any vehicle financed on contract hire and you can search for any manufacturer or make, using the £ shopper at comparecontracthire.com.