Flexible vs contract hire, which business van hire approach is best?

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Andrew Hill • Sep 04, 2017 • Van hire

So, you’ve made the choice to hire your commercial vehicles. But with the range of hire options out there, how can you decide which one best suits your business needs?

With so many factors to consider, knowing which business van hire approach will provide the most value in your business is tricky - especially with so many options available.

We take a look at two of the most popular van hire options businesses like yours choose: traditional contract hire and flexible hire. But which is best?

Let's find out.

But first - you can find out whether hiring or buying vehicles is the best option for your business with our comprehensive Hire or Buy checklist: business, sector and economic considerations:


Hire or Buy

Free Checklist: Hire or Buy: business, sector and economic considerations



Firstly, what's the difference?

1. Contract van hire

Contract hire is a fairly sweeping term, as basically any hire option could be viewed as a 'contract'. It's the small details that will differ between each provider, but in a nutshell:

Contract hire is renting a vehicle for a fixed period of time, with a set mileage allowance and a fixed rental cost. Many businesses will choose to hire vehicles in this way for longer periods of time (usually 2 years or longer, with exceptions). With contract van hire, once your hire period ends, you'll return the vehicle to the rental company. Providing your vehicle is in a reasonable condition and doesn't exceed the agreed mileage limit, your contract will end - but more on this later.

Key considerations for contract van hire:
  • When you hire a vehicle through a contract, you'll pay an upfront payment, followed by smaller monthly payments.

  • You'll usually have to provide your own maintenance (unless you opt for a package with your rental provider, of course).

  • Typically, you'll have to arrange your insurance - though there are some exceptions.

Contract hire is ultimately a great option for businesses who don't mind a longer commitment, and may want a specific vehicle for a fixed period of time.

2. Flexible van hire

Flexible van hire is exactly what you think. Providers will offer vans for hire, but instead of having fixed terms in place, you'll be able to rent vehicles on a flexible basis.

It acts as an alternative to signing long-term contracts, or committing to long leases. Different providers will vary on the minimum length of lease required, however some will offer complete flexibility.

The main difference between contract and flexible hire is that once your lease is up, you can choose to hand the vehicle back, or continue leasing - as much as you need! Often, you'll be able to change vehicles, too.

Key considerations with flexible hire:
  • Like contract hire, you'll likely pay an upfront rental charge followed by smaller payments.
  • Usually, you'll pay a fixed amount charged on a continual basis, which will cover mileage (unless you exceed the limit), maintenance, road tax and maintenance.

  • Flexible van hire often includes insurance as a standard, but it's worth researching your own policy details prior to hiring a vehicle.

Flexible van hire is becoming an increasingly popular hire option in the current climate, as some businesses find the freedom to return vehicles when they no longer need them extremely valuable.


But which business van hire option is best?

Both of these hire options offers a number of benefits to businesses with different needs. However, in order to make an informed decision about which is best for you, it helps to understand the pros and cons of each.

Contract van hire: the pros and cons

As we've explained, contract van hire allows businesses to hire the vehicle they want for a specified period of time. While the lack of flexibility could be seen as a disadvantage - not all businesses will require, or be suitable for, flexible hire contracts.

Another great advantage of contract van hire is that it allows your business to concentrate on core activities without the financial risk and admin burden of purchasing vehicles outright - all while having more control over your hired vehicle.

However, there are some disadvantages.

  • Additional costs
    Significant damage or wear and tear to your van(s) could lead to additional charges. Additionally, because of your agreed contract, returning the vehicle before the agreed date will more than likely incur additional charges.

  • Long term commitment required
    The clue's in the name - "contract" means you have to stick to an agreement. Unlike flexible hire, you won't have the freedom to end the lease at short notice. In times of uncertainty (where perhaps you no longer require the vehicle), it's important to remember that you'll still have to continue paying for the contract.

Overall, contract hire can be a great option. However, in the current climate, is committing to a longer term contract where you can't return the vehicle the best idea when you need to keep cash flow in your business?

Ultimately, it's whatever works best for your business. But if you'd like a bit more freedom, it may be worth considering flexible van hire.

Flexible van hire: the pros and cons

When you don’t want the long term commitment of contract hire or you simply require an additional vehicle for one day or a month or more, a flexible business van hire option is your best bet.

At Flex-E-Rent, for example, you can easily increase your fleet capacity at the guaranteed price - a complete contrast to if you were to invest in fixed term hire.

With flexible hire, you'll also get:

  • Freedom of no long term commitment
    Unlike contract hire, you aren't obligated to commit to a long-term contract - you can simply return the vehicle when you no longer need it. Yes, it really is that simple.

  • Guaranteed costs, no hidden fees
    Like contract hire, you'll have to pay a fixed initial payment; however, unlike the other option, you won't be subject to hidden fees. You'll only pay for the use of the vehicle, and not the expensive extras that can come with other hire options.

  • Ability to increase or reduce your fleet capacity to meet requirements
    Perhaps the biggest benefit of flexible hire is that you're able to easily scale or reduce your fleet to meet fluctuating demand - something that isn't possible with a contract. In fact, you can see how valuable our flexible hire offering was to businesses during the COVID-19 lockdown right here.

The only real downside to flexible hire comes from its providers. Not all flexible van hire providers will offer the same level of service, or include additional offerings such as maintenance, servicing or fleet management.

However, with Enterprise Flex-E-Rent, you can be sure that you'll get a flexible van hire solution to suit your business. All of our flexible hire contracts come with vehicle maintenance as a standard, you never have to worry about your vehicles being off the road for long periods again - especially since we can provide you with a courtesy van right away.

Flexible business van hire from Enterprise Flex-E-Rent

Even with the clear benefits of flexible hire, whether you choose this option or more traditional contract hire will depend on your individual business demands. 

That being said, if your fleet capacity is expected to change frequently (whether that's due to seasonal demand or economic uncertainty), a flexible hire option could be invaluable in keeping your business moving. Find out more about the difference between balloon & closed-end leases here.

Whatever you decide, it’s important to bear in mind that hire packages differ, along with the level of support you receive – so, it’s important to weigh up your options and choose wisely. Speak to one of our vehicle hire experts for some personalised guidance.

However, you should know whether hiring or buying vehicles is the best option for your business. Find out the pros and cons of each option with our comprehensive Hire or Buy Checklist: business, sector and economic considerations: 

Hire or Buy

Free Checklist: Hire or Buy: business, sector and economic considerations

We compare the hiring vs buying vehicles for your fleet in our checklist, looking at the pros and cons of each to help you make your decision.



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