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Contract Hire

Contract hire is widely seen as the most popular way to operate materials handling equipment. Customers pay a fixed monthly rental that includes maintenance and servicing.

Contract hire is generally used by businesses that want to;

  • Fix their materials handling costs for up to 7 years
  • Off-set 100% of rentals against taxable profits
  • Take advantage of off-balance sheet funding
  • Enjoy usage benefits without ownership risks
  • Use their cash in other areas of the business
  • With contract hire, customers have no need to;

  • Budget for unexpected maintenance costs
  • Tie up cash in depreciating assets
  • To pay big deposits or VAT on delivery
  • To constantly negotiate servicing costs
  • To borrow funds on an overdraft facility
  • In 1990, contract hire accounted for 15% of all new truck sales in the UK. In 2006,
    contract hire accounted for 70% of all new trucks sales in the UK.

    According to industry statistics, 85% of UK companies now use contract hire as a
    means of acquiring capital equipment.

    Lease Purchase

    A lease purchase contract allows the buyer to purchase the truck for a fixed monthly fee over a predetermined period.

    For tax purposes, the hirer is considered to be the owner from day one and can claim available tax allowances and off-set interest charges. The asset is also shown on the balance sheet.

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