It is important that a business opting for a contract hire lease understands the many aspects of such a lease. Here are some things a lessee should consider when going for a contract hire.
The tax relief that businesses can get is impacted by the CO2 emissions of the leased company cars. A restriction of 15% is levied for cars acquired through contract hire lease that have emission figures of above 160g/km. This comes under the high carbon emission category and therefore offers less tax benefits to the lessee. So, the running costs associated with leased vehicles that have CO2 figures of over 160g/km are more. No such restriction is imposed on leased vehicles that have CO2 figures of under 160g/km.
Businesses have to insure the car or truck in accordance with the requirements laid down by the leasing company. For a leased vehicle that is written off due to any reason, the lessee may have to pay the difference amount between the book value of vehicle (as determined by the leasing company) and the insurance company payout.
Vehicle maintenance is another important aspect that businesses should keep in mind. A leased vehicle that is returned in a damaged condition will attract a charge.