We always quote 3 payments in advance followed by either 23 or 35 monthly payments, so as not to distort the monthly payment.
A typical Contract Hire or Personal Contract Hire quotation should show three payments in advance, followed by perhaps 23 or 35 monthly payments depending on the term. Although we do not, some companies will quote 3 payments in advance followed by 47 payments. There is nothing wrong with this but the longer term is a factor that needs to be taken into account when making a cost comparison.
Other companies will advertise what appears to be a low monthly rental, however on closer inspection, it becomes evident that rather than three payments to be made in advance there are six. On other occasions the rental appears low because a much larger initial payment is required, sometimes running into thousands of pounds. This tends to cause confusion in the market and make it difficult for the public to make comparisons.
In general the most straightforward way to make a cost comparison is to look at companies quoting three payments in advance followed by 23 or 35 payments and 10,000 miles per annum. This is the mileage companies normally advertise. Should your annual mileage requirements be higher most companies will be happy to provide a quotation at your required level.
It does not automatically follow that a vehicle being advertised with a large deposit or six payments in advance is more expensive, although they generally are. Should you wish to establish which quote is the most competitive for a similar vehicle advertised, one company offering three and another six payments in advance, the calculation is as follows.
A Contract Hire Quote of £200 per month over 36 months with three payments in advance.
| £ | |
| 3 payments in advance | 600 |
| 35 monthly payments @ £200 | 7,000 |
| Total cost | 7,600 |
The same vehicle quoted at £189 per month over 36 months with six payments in advance.
| £ | |
| 6 payments in advance | 1,134 |
| 35 monthly payments @ £189 | 6,615 |
| Total cost | 7,749 |
In this example the vehicle that appears cheaper at first glance, is in practice more expensive. There is also a slight financial disadvantage when making six payments in advance; the extra cost of the three additional payments has to be found at the beginning of the contract, rather than being spread over the term. The difference however is minimal and in the interests of simplicity it is probably best to ignore this factor when making a comparison.
All forms of funding provided by Bowater Price plc is subject to status. A business user is defined by certain funders, as having been in business for two years and VAT registered. We do however have other lending sources available that will consider applications from companies that don't meet these criteria.