# Business contract hire explained > What business contract hire is, how the initial rental, term and mileage work, what is included, and how it compares with owning your vans outright. Source: https://fleetme.co.uk/guides/business-contract-hire-explained --- # Business contract hire explained By [the FleetMe team](https://fleetme.co.uk/about) · Updated 14 October 2026 · 8 min read The short answer **Business contract hire is a fixed-term vehicle lease for a business. You pay an initial rental, then fixed monthly rentals, to use a van for an agreed term and mileage. You hand it back and never own it.** ## What is business contract hire? ## How is a business contract hire quote built? ## What is included in the rental, and what is not? ## Which businesses does contract hire suit? ## What happens at the end of a business contract hire agreement? ## How does contract hire affect your tax and VAT position? ## What changes in 2026: leases move onto the balance sheet ## How FleetMe handles a business contract hire enquiry ## Put a price on it Tell us the vehicle, the term and the annual mileage you need and we come back with a written quote, and we aim to do that the same working day. Rentals are quoted ex VAT with the VAT-inclusive figure alongside, and your agreement is with FleetMe. How many vehicles do you need? Takes a minute. No obligation. ## Enquiry received, one step to go. We can put a guide figure together from what you ve told us. To confirm the vehicle, the monthly rental and a delivery date **in writing**, we need your business details and the underwriting information. Next step · about 5 minutes Complete your business application It s pre-filled from your answers. Nothing is committed until we confirm your quote and you sign. No obligation · About 5 minutes Prefer to leave it there? We ll still be in touch about your enquiry. ## FAQs ### Do you own the vehicle at the end of business contract hire? No. Contract hire is a hire agreement, so the vehicle comes back to FleetMe at the end of the term. There is no purchase option and no final balloon payment. If ownership matters to your business, a finance lease, contract purchase or outright purchase is the route to look at instead. ### Is road tax included in business contract hire? Yes. Vehicle excise duty is included for the full length of the agreement, along with the manufacturer warranty. Insurance, fuel or charging, AdBlue, tolls and clean-air charges are not included, and servicing is only included if you take a maintenance package. ### What does 3+11 mean on a lease quote? The first number is the initial payment, expressed as a multiple of the monthly rental. The second is how many monthly payments follow it. The initial payment is the first payment and covers month one whatever its size, so on a 12-month term eleven payments always follow: a 1+11 is one month up front then eleven monthly (twelve rentals in total), and a 3+11 is three months up front then eleven monthly (fourteen rentals in total). The two numbers do not add up to the term, which is the part people get wrong. FleetMe quotes 1+11 on courier agreements and 3+11 on commercial van and car agreements. ### Can a new limited company get business contract hire? Often yes. Commercial underwriting weighs the business, its directors and affordability rather than looking only for years of filed accounts, and a director’s guarantee is commonly part of the arrangement. We will give you an honest answer quickly rather than leaving you waiting. ### Can you end a business contract hire agreement early? Usually yes, by agreement and for a termination charge, because you are ending a fixed-term contract. Ask us for the settlement figure in writing before you decide. Never simply stop paying, talk to us early and there is almost always a better route. ### Is business contract hire cheaper than buying a van? It is usually cheaper on cash flow and more predictable on cost, because you pay for use rather than the whole asset and carry no resale risk. Whether it is cheaper overall depends on how long you keep vehicles, your tax position and what capital allowances you could claim. Model both with your accountant. ## Next step Business van leasing → How the monthly rental is built, what is included, and who business contract hire is for. Van leasing for a new limited company → The honest answer on who gets considered, and what we look at when we assess a business. Or go straight to the range: [browse vans and pickups](https://fleetme.co.uk/vans) · [company cars](https://fleetme.co.uk/cars) ## Related