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CONTRACT HIRE AGREEMENT
THIS CONTRACT HIRE AGREEMENT (this "Lease") dated this 17th day of January, 2021
BETWEEN:
________________________ of _____________________________________(the "Hirer")
OF THE FIRST PART
- AND -
________________________ of _____________________________________(the "Owner")
OF THE SECOND PART
IN CONSIDERATION of the mutual covenants and promises in this Lease and other valuable consideration, the sufficiency of which consideration the Parties hereby acknowledge, the Owner leases the Vehicle described in this Lease to the Hirer, and the Hirer leases the Vehicle from the Owner on the following terms:
The Hirer will ensure that the Owner is named as registered owner, and as "Additional Insured" and loss payee in the insurance policy (the "Insurance Policy").
IN WITNESS WHEREOF the Parties have executed this Lease on this _______ day of _______________________.
_____________________________________________________(Owner)
_____________________________________________________(Hirer)
NOTICE TO THE HIRER:(1) This is a lease. You are not buying the motor vehicle previously described;(2) Do not sign this Lease before you read it or if it contains any blank spaces to be filled in;(3) You are entitled to a completely filled in copy of this Lease when you sign it;(4) Warning -- unless a charge is included in this Lease for public liability or property damage insurance, payment for that coverage is not provided by this Lease.
Hirer Initials
Owner Initials
Itemisation of Gross Capitalised Cost
(A) Value of the vehicle as equipped at the time of entering into the Lease ............................................................................................................
£1
(B) Values and descriptions of accessories and optional equipment the Owner agrees to add to the vehicle after entering into the Lease ...............
none
(C) Premium to be paid for each policy of insurance ................................
(D) Charge for each service contract ..........................................................
(E) Outstanding Lease balance or prior credit balance .............................
(F) Itemisation of any other good or service not included above ..............
(G) Total Gross Capitalised Cost .............................................................
£1.00
Monthly Payment Calculation
Gross capitalised cost. The agreed upon value of the vehicle (£1) and any items the Hirer pays over the Term (such as service contracts, insurance, any outstanding prior credit or Lease balance) ....................................................................................................
Capitalised cost reduction. The amount of the trade in allowance and down payment made by the Hirer to reduce the gross capitalised cost ...................................................................................................................
-
£__________
Adjusted capitalised cost. The amount used in calculating the periodic payments ..................................................................................................(This amount along with the additional early termination charges will be used in determining your early termination liability.)
=
Residual Value. The value of the vehicle at the end of the Lease used in calculating the base monthly payments ................................................
Depreciation and any amortised amounts. The amount charged for the vehicle's decline in value through normal use and other items paid over the Term ............................................................................................
Interest charge. The interest charged in addition to the depreciation and any amortised amounts .......................................................................
+
£0.00
Total of base monthly payments. The depreciation and any amortised amounts plus the interest charge ...............................................................
Lease payments. The number of payments in your Lease .....................
/ 1
Base monthly Payment............................................................................
Monthly VAT..........................................................................................
_____
Total Monthly Payment...........................................................................
A Contract Hire Agreement is also known as a:
A Contract Hire Agreement is a contract made between a vehicle owner and an individual or company who leases the vehicle for a predetermined amount of time.
Individuals and companies may use a Contract Hire Agreement to lease new and previously-owned cars, trucks, and motorcycles. However, you can also use the agreement with any motor vehicle that has a Vehicle Identification Number (VIN), which may include motorized scooters and recreational vehicles.
The owner is the party who owns the vehicle and the hirer is the party who leases the vehicle. If two people co-own a vehicle, you can include multiple owners within your Contract Hire Agreement. If multiple people are leasing a vehicle together, such as spouses, you can include multiple hirers.
Prepare a Contract Hire Agreement by compiling the necessary information:
LawDepot’s Contract Hire Agreement template asks you a few simple questions. Based on your answers, we’ll customise and create your document for you.
Yes, a Contract Hire Agreement is a necessary document when an individual leases a vehicle from a company. Generally, a dealership that leases vehicles will have its own documentation that protects the company and its hirers. However, if you’re negotiating a vehicle lease with a company that doesn’t ask you to sign a contract, you can use LawDepot’s Contract Hire Agreement template as a way to protect all parties involved.
You are responsible for obtaining the necessary insurance coverage and maintaining the vehicle. If you return the leased vehicle with excessive interior wear, dents or scratches, or any significant mechanical damage, the vehicle owner may charge you for the repairs.
Some owners may limit the number of kilometres the hirer can use. In this case, you’re responsible for keeping track of your mileage. If you exceed this limit, the owner may charge a mileage fee at the end of the lease. Alternatively, an owner may offer a vehicle lease with unlimited mileage.
Use a Contract Hire Agreement to protect the interests of both the owner and the hirer. Documenting the lease terms helps prevent misunderstandings between the two parties and provides proof in the event of a legal dispute.
If you’re negotiating lease terms with another individual, you likely won’t have access to a typical dealership lease form. Instead, use a Contract Hire Agreement. For example, you could use this document when loaning your van or truck to a friend or family member for an extended period of time.
Including an option to purchase in a Contract Hire Agreement gives the hirer the choice to buy the vehicle at any time during the lease or at the end of the lease. Generally, the purchase price is the residual value of the vehicle, unless the hirer negotiates a lower price. The residual value is the estimated value of the vehicle at the end of the lease term.
Your ability to end your lease early depends on the contract and the other party’s willingness to accommodate your request. If the other party consents to early termination of the agreement without penalty, you’ll be able to end your lease without any problems.
However, if a Contract Hire Agreement states that the hirer is responsible for the difference between the residual value and the realised value when terminating early, the hirer will have to pay. The realised value is the actual sale price that the owner can sell the leased vehicle for after the hirer terminates the lease early.
At the end of the vehicle lease term, the hirer returns the vehicle to the owner. If the hirer paid a security deposit at the beginning of the contract, the owner will inspect the vehicle and determine if the hirer will receive their deposit back. Besides properly maintaining your leased vehicle, you can better ensure the return of your security deposit by removing all your personal items from the vehicle, vacuuming out the interior, and washing the exterior.
Note: Your initial answers are saved automatically when you preview your document.This screen can be used to save additional copies of your answers.