Last updated: 15 Sep 2026

Vehicle finance

Business contract hire

Business contract hire is a way to run a car, van or fleet through your company on a fixed monthly rental, with no ownership, no resale risk and nothing more to pay at the end beyond your agreed mileage.

Compare business contract hire deals from multiple lenders across our panel in one application, with a dedicated funding specialist supporting you through to completion.

Why get contract hire with Capitalise?

  • 200,000+ UK businesses trust us

  • Business credit data powered by Experian

  • £2bn in funding approved

  • FCA regulated since 2016

What is business contract hire?

Business contract hire is a long term rental agreement, usually running two to four years, where your company pays a fixed monthly rental to use a car, van or other vehicle supplied by a leasing provider. The leasing company buys and owns the vehicle throughout the agreement, and your business simply hands it back at the end rather than working towards ownership. Road tax is included in the rental for the whole term, while fuel and insurance stay your business's responsibility.

Why choose business contract hire?

  • Fixed, predictable costs

    One monthly rental covers your vehicle for the whole term, so you always know what a car, van or fleet is costing your business, with no surprise resale bill waiting at the end.

  • No resale risk

    The leasing company owns the vehicle and carries the risk of what it's worth when the agreement ends, so a downturn in used vehicle values is never your problem.

  • Maintenance made simple

    Add a maintenance package to your rental and servicing, tyres and repairs are covered in one predictable monthly cost, instead of unplanned bills through the term.

How does business contract hire work?

Your monthly rental is priced on how much the vehicle is expected to lose in value over your contract, rather than its full purchase price, plus the leasing company's charges. As an example, a van bought for £30,000 and expected to be worth around £12,000 after three years mainly has its rental built around that £18,000 gap in value, spread across the term, rather than the vehicle's full price.

Most agreements ask for an initial rental worth several months of your monthly cost upfront, commonly structured as 3, 6 or 9 months followed by the remaining monthly payments, often described as a 3 plus 35 or 6 plus 35 profile. A bigger initial rental lowers your ongoing monthly cost, in the same way a bigger deposit would on hire purchase.

You also agree an annual mileage allowance before you sign. Setting this realistically matters, since going over it means paying an excess mileage charge, priced in pence per mile, when you hand the vehicle back.

Which vehicles can you get on business contract hire?

  • Cars

    Help your team travel confidently with reliable, comfortable vehicles that support everyday business journeys.

  • Vans

    Increase your efficiency with practical, durable transport that’s built for trades, deliveries and busy daily workloads.

  • Fleets

    Keep your whole team moving with a consistent set of vehicles that scale with your operations and support long term growth.

  • Electric vehicles

    Lower your running costs and reduce your environmental impact while benefiting from potential tax advantages.

How much does business contract hire cost?

The monthly cost of business contract hire depends on the vehicle's price, how much value it's expected to lose over your term, your initial rental, the mileage you agree and whether you add maintenance. These figures vary by vehicle and lender, so treat the table below as a guide to how an agreement is typically structured rather than a quote.

Contract term

2 to 4 years

Initial rental

Usually 3, 6 or 9 months' rental paid upfront

Annual mileage

Agreed at the start, with excess mileage charged in pence per mile if you go over

Maintenance

Optional, can be added to your monthly rental

Road tax

Included for the whole term

Ownership

Stays with the leasing company, vehicle is returned at the end

What are the advantages and disadvantages of business contract hire?

  • Advantages of business contract hire

    • Fixed monthly costs make budgeting straightforward, with no surprise bill for depreciation at the end

    • Road tax is included for the whole term

    • Servicing, tyres and repairs can be bundled into one predictable payment with a maintenance package

    • Upgrading to a newer vehicle at the end of your contract is straightforward, since there's nothing to sell first

    • No large final payment or ownership decision to make when the agreement ends

  • Disadvantages of business contract hire

    • You never own the vehicle, whatever you pay towards it

    • Going over your agreed mileage means paying an excess charge when you hand it back

    • Ending the agreement early usually comes with a charge

    • The vehicle must come back in fair wear and tear condition, or you may be charged for damage

    • Fuel and insurance still sit outside the rental and remain your responsibility

Am I eligible for business contract hire?

Most lenders on the Capitalise panel base a decision on your business and the vehicle together, so eligibility usually comes down to a mix of the following.

  • Being an actively trading UK business, sole trader, partnership or limited company, usually with at least a few months of trading history

  • A business credit score that shows your business manages its existing obligations well

  • Evidence your business can comfortably afford the monthly rental

  • A director willing to sign a personal guarantee, if the lender asks for one on a limited company application

  • A realistic annual mileage estimate for the vehicle you want to hire

What documents do you need for business contract hire?

Having these documents ready will speed up your application:

  • Details of the vehicle you want, including the make, model and mileage you have in mind

  • 3 to 6 months of business bank statements

  • Your last set of filed accounts, if you have them

  • Proof of ID for each business owner or director, such as a passport or driving licence

  • Proof of address dated within the last 3 months

How does business contract hire compare to other vehicle finance?

Contract hire

Finance lease

Hire purchase

Ownership

Never, vehicle is returned

Only if you take a sale option

Yes, after the final payment

Resale risk

Stays with the leasing company

Stays with your business

Stays with your business

Maintenance

Can be included in your rental

Arranged separately

Arranged separately

Best suited to

The lowest monthly cost, with no resale value to manage

Businesses happy to manage resale value for a lower cost than hire purchase

Businesses that want to own the vehicle outright

How do I apply for business contract hire?

  • Green circle with a white number "1" in the center.

    Tell us about the vehicle

    Let us know the car, van or fleet you want to hire, along with the mileage and term you have in mind.

  • Green circle with white number "2" in the center.

    Complete your application

    Share some details about your business so lenders can assess your application. This uses a soft search, so it won't affect your credit score.

  • Green circle with the white number 3 in the center.

    Get matched and funded

    A dedicated funding specialist takes your application to the contract hire lenders on our panel best suited to your business, and supports you through to completion.

Trustpilot

Ready to get started?
Apply today and get the vehicles your business needs.

Explore our related articles

frequently asked questions