What is Contract Hire?

Contract Hire is an operating lease that allows a vehicle to be supplied to a customer over a fixed period, for a fixed monthly fee.

Many businesses find this form of leasing to be a convenient and cost effective fleet solution. Unlike some suppliers, SMC offers a ‘whole of life service’ including acquisition, ongoing servicing maintenance, checking and administration, through to disposal. In addition, all of our contracts are kept ‘in house’, which means that we have instant access to all data, and can provide customers with comprehensive information and continuous guidance and support.

What are the advantages of Contract Hire?

Financial: the financial advantages of a Contract Hire solution from SMC are many and varied; they include:

  • Accurate monthly budgeting
  • Improved cash flow through minimum capital expenditure
  • Fixed interest rates
  • Rentals can be offset against taxable income
  • VAT is recoverable on monthly rentals
  • There is no risk of depreciation
  • Road fund licence is included for the contract duration
  • Fixed maintenance fee (if included in contract)


  • Reduced administration, which can include as many aspects of the driver- and vehicle-associated paperwork as you would like to outsource to us


  • Ongoing advice and support on all aspects of your fleet, fleet policies, driver training, etc.
  • No vehicle disposal problems

Finance Lease

Finance Lease allows a business to lease the vehicle for a fixed period of time. At the end of the agreement the vehicle is sold and the lessee receives up to 100% of the proceeds of the sale to offset against rentals paid.

This type of hire provides complete flexibility as it does not contract you to a specified mileage and a balloon payment could be included in the contract to reduce the monthly payments.

If at the end of the agreement you would like to extend the contract for another year, there is usually a cost of one month's rental (peppercorn payment).


  • Low Deposit
  • The vehicle is classed as an Asset on the balance sheet
  • How the vehicle is disposed of is down to the lessee
  • Up to 100% of VAT on rentals may be recovered, if VAT registered
  • Businesses that are not VAT registered can spread the VAT cost over the rentals rather than finding the capital VAT up front on commercial vehicles.


Flexilease provides customers with a solution to short term rental of vehicles at a competitive price. Our contracts range from one month to twelve months with a number of options available at the end of the contract. Flexilease is ideal for companies that need the use of a short term vehicle for probationary periods, garden leave, short term contracts and interim vehicles while a vehicle is on order.

Flexilease offers a low initial outlay and flexibility allowing customers to set a contract that suits their needs. If you are looking for a flexible arrangement then Flexilease is the option for you.

Lease Purchase

If you are looking to own a vehicle but would like to reduce your monthly payments, Lease Purchase may provide you with a solution. It is a purchase plan that allows you to incorporate a balloon payment at the end of the agreement. As with a Hire Purchase agreement there are fixed monthly payments and, once the final balloon payment has been made, outright ownership is achieved.


  • Low Deposit
  • If VAT registered, VAT on the purchase price may be re-claimed
  • No VAT on monthly payments, Will be an asset and attract write down allowances

Sale and Leaseback

If you need to release capital back into the business we can buy back part or all of your existing fleet releasing the capital that is tied. The same vehicles are then leased back to you on a fixed monthly rental.

On leasing the vehicle the company benefits from the advantages of contract hire such as not carrying the risk of future values of vehicles.

Hire Purchase

This type of finance is secured against the vehicle, it is arranged by the dealer, who are agents for a finance company. It is a flexible type of finance as there are no mileage restrictions and the balance is paid with no balloon payments. You will normally pay an initial deposit followed by monthly instalments. Once the final payment is made you own the vehicle. You will need to settle the finance before you sell the vehicle.

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