Contract Hire is the most popular Leasing product and is where a customer is a long term Lessee of the Vehicle.
Contract Hire is an agreement whereby the Lessee (Customer) pays a set amount each month to drive their chosen vehicle for an agreed amount of time and an agreed annual and contract mileage.
The Lessee builds their vehicle to their required specification and once they take delivery they pay the finance company the first payment which is called the Initial Rental. The Initial rental is normally a multiple of the regular monthly payment i.e 3x 6x or 9x. This can sometimes be called 3,6 or 9 Rentals in advance.
The lessee then pays a regular monthly payment for the duration of the lease contract (Normally either 24, 36 or 48 months) to drive the agreed amount of mileage and at the end of the contract they return the vehicle to the leasing company and replace it with a new vehicle.