HOW DOES IT WORK?

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

• If the business is VAT registered and the car is solely for business use (not available for private use), then 100% of the VAT may be reclaimable on the lease rental.
• If the business is VAT registered but the car is made available for private use, then 50% of the VAT on the lease rental can be reclaimed.
• If the busines selects to take the Service Maintenance and Repair (SMR) element, then 100% of the VAT chargeable on the SMR should be fully recoverable subject to normal VAT rules.

NB The non-claimable element of VAT is sometimes referred to as "Blocked VAT"

If the business is not VAT registered, there is no reason why they cannot have Contract Hire; they will just not be able to claim back any element of the VAT.

What's included in the Service Maintenance and Repaitr (SMR)?

• All scheduled servicing
• Any mechanical parts replaced including labour for the duration of the contract
• Unlimited Tyre replacement (due to normal wear)
• Annual renewal of Road Fund Licence
• Roadside assistance for breakdown/recovery

Who owns the vehicle?
Business Partner are the legal owners of the vehicle, however, the business (lessee) is responsible for any costs not covered by the SMR contract i.e. parking fines, traffic violations, accident damage.

What happens at the end of the contract?
Prior to the end of the contract, you will be notified that the vehicle must be returned to Business Partner and arrangements will be made to collect the vehicle. The vehicle will be inspected in your presence and any excess mileage or body damage will be noted and agreed with the you should this be applicable.

What happens if you exceed the original stated mileage?
Business Partner has not charged the business anything (apart from interest) for the value of the vehicle at the end of the contract. However, if the anticipated mileage has been exceeded, then this may have a detrimental effect on the value of the vehicle, which Business Partner had not anticipated. Therefore, the business is charged an amount for each mile in excess of the original contract mileage at a rate notified at the commencement of the contract.  If during the contract, the mileage specified at the start looks to be insufficient you can contact Business Partner and they will change the contract to reflect the revised mileage - similarly, if the mileage looks as though it will be less than anticipated, Business Partner will look to reflect this in a re-write of the contract.

Terms and Conditions
Ford Business Partner Contract Hire is available to business users only.  All examples exclude VAT.  Any example monthly rentals are based on 36 month non-maintained agreements, profile 3-0-35, payment in advance of 3 monthly rentals + VAT, followed by 35 monthly rentals + VAT, with metallic paint and a mileage of 10,000 per annum.  On the road cash price includes Government Road Fund licence for 12 months and Government Vehicle First Registration Fee.  When the vehicle is returned it must be in good condition and not have exceeded agreed mileage otherwise further charges will be incurred.  All finance and hiring facilities are subject to status.  Guarantees/Indemnities may be required.  Prices are correct at time of going to print and are subject to change without notice.  This promotion cannot be used with any other promotion.