What does 3+ mean when looking at Contract Hire figures in the UK?
You might be considering a new contract hire or lease, you might have one and you’re looking for a replacement but comparing quotes can be really difficult, especially because firms either display an initial rental or show 3+, 6+ or 9+, but what does this mean?
There is lots of jargon in the motor trade and in particular the contract hire & leasing world. When you see leasing offers advertised they will generally be 3+ or 6+ followed by a 2 digit number such as 3+35, 3+47 or 6+35, so let’s break these numbers down and explain what they mean.
The first number that you see relate to the initial payment at the beginning of a contract hire or lease, often contract hire offers advertise 3+, this means that you will pay 3x whatever the regular payment is shown as, if it says 6+ it will be 6x the regular monthly payment.
The second (generally) 2 digit number refers to the length of the contract hire or lease. So after the 1st month this is how many months the contract will last, for instance a +35 would be a 3 year contract, +23 would be a two year contract and so on.
Examples of a quotation
This example is made up, so please don’t try and contact my business to try and order one:
Ford Model T 5dr with Manual Air Conditioning
Finance Type: Business Contract Hire
Upfront Payment: £600.00 plus VAT
Term: 3+35
Contract Length: 36 Months
Annual Mileage: 10k per annum
Maintenance: Not Included
Monthly Payment: £200.00 plus VAT
In the example above the monthly price is £200.00 plus VAT, with the VAT (at the current rate) its £240.00 inc. VAT. This is your regular monthly payment after your initial rental has been paid.
You initial payment is £600.00 plus VAT, which is 3x the monthly rental. The term 3+35 again, means its a 36 month contract. This equation does not mean that you will have the car for 38 months.
On another note, the annual mileage is 10k per annum, this means that over the 36 month term (3 year contract), you will be allowed to do 30,000 miles before an excess mileage charge is levied. You will not get any money back for unused mileage.
Is there anything that confuses you about Contract Hire?
If you need something explaining about a contract hire or lease, I’d only be too pleased to try and help. Drop it in the comments below and I will answer it in another story on Medium.
About me and my business?
I have been running Cocoon Vehicles since 2007, my approach is simple. I want to be upfront and honest with the customer from day one. This can be in the return conditions, collection charges, etc. We mainly deal with short term car leases and car subscriptions, but we do also help customers go into longer term leases.
I’ve been in the motor trade for almost 16 years now, and didn’t agree with the many practises that went on to get customers to sign on the dotted line, this could be from hiding interest rates to offering free paint protection. I write about how people can avoid falling into the same traps.