June 7, 2020
Most funders of contract hire contract will allow an extension and the rules of these extensions are usually covered in the Master Hire Agreement signed at the start of the contract. Usually an extension can only be requested in the final 6 months. Business and personal contracts are handled very differently because personal (Regulated contracts) have to follow very specific rules. However in most funders rules a 6 month and a 12 month extension can be considered for both business and personal. Please note, customers do not have the automatic right to go into informal extension. Do speak to you broker if you think an extension is a good option for you; if they are unavailable we are happy to advise you where we can. We will always speak to our customers as they approach the end of contract with the various options available. Extensions should mean that the customer can get extra life out of vehicle that has worked well for them over a period. . . and can often mean there is a reduction in the rental. If is worth noting that most contract will ACUTALISE the rentals on an extension. This means if you are paying £200 a month on a 3_35 contract (3 months up front and 35 following payments) and extend 12 months (lets assume payments stay the same). That would mean extension rentals would be £211.11 a month. It is actually same payment without the initial deposit artificially reducing the rental.
Contract mileage can be amended on both Non- Regulated and Regulated agreements with most funders in the contract hire market. The maximum total mileage on a contract is usually around 150,000. There is usually a limit on how much mileage can be added or removed. Also there is usually a minimum (often at least 2,500 Miles) to ensure that it is worth administering. Amendments very rarely will be allowed in the first 12 months or in the last 6 months of the lease. Customers are often limited to 3 contract amendments over the life-time of the contract, however it is quite normal to have a number done over the life of a contract when they are well managed. Remember it is OFTEN but not always true that your rentals will reduce when mile is reduced and will increase when mileage is increased. The reason it would not be the case is if the values of the vehicle in the present market have changed significantly for the worse. Please note, customers do not have the automatic right to go into contract amendments.