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  3. Business Contract Hire (BCH) for Vans: A Complete Guide

Business Contract Hire (BCH) for Vans: A Complete Guide

Learn how Business Contract Hire works for vans. Low monthly rentals, no depreciation worries, and predictable costs. Compare BCH pros and cons at Van Broker UK.

What is Business Contract Hire?

Business Contract Hire (BCH) is a fixed-term leasing agreement that lets your company use a brand-new van without owning it. You pay monthly rentals for a set period and mileage allowance, then simply return the vehicle at the end.

It's ideal for businesses that want new, reliable vans on the road with minimal admin, predictable costs, and no resale risk.

How It Works

  1. Choose your van and agree annual mileage.

  2. Pay an initial rental (typically 3-9 months).

  3. Pay fixed monthly rentals for 2-5 years.

  4. At the end, return the van - no ownership or disposal required.

Optional maintenance packages can include servicing, tyres, and road tax, making budgeting effortless.

Contract Hire in a sentence:
You rent your van for a fixed term, return it, and start fresh with a new one.

Key Advantages

✔ Low monthly payments - often cheaper than HP or FL.
✔ No depreciation or resale concerns.
✔ Easy fleet renewal - upgrade to new vans at the end of term.
✔ Optional maintenance - fix running costs and reduce downtime.
✔ VAT benefits - reclaimable VAT on the rentals if used for business.
✔ Off-balance-sheet for many companies.

Considerations

⚠️ You'll never own the van.
BCH is pure rental; ownership stays with the funder.
⚠️ Mileage and condition limits apply.
Exceeding agreed mileage or damage can incur charges.
⚠️ Early termination fees.
Ending a lease early can be expensive.

Who It Suits

  • Businesses that prioritise cashflow and predictability

  • Fleets and growing SMEs wanting new vans every few years

  • Companies that prefer to outsource maintenance

  • Firms seeking VAT efficiency and a clean balance sheet

Example Scenario

A facilities-management company leases ten Renault Masters on BCH.

  • Initial rental: £1,800 per vehicle

  • Term: 36 months / 60,000 miles

  • Monthly rental: £300 + VAT
    At the end, the company returns the vans and upgrades to new ones without handling resale or depreciation.