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BCH, BCP or HP? Fleet funding options explained

There are lots of different ways that you can finance your fleet. We’ve put together a short guide to help you understand the different funding methods and how to decide what’s best for you and your business.

We want to make sure you choose the right finance plan for your fleet.

Business contract hire (BCH)

(You will not own the vehicle)

BCH is one of the most popular ways for UK businesses to fund their fleets. It’s essentially a long-term vehicle rental. Instead of buying, you simply hire a vehicle over an agreed period of mileage, and return it when the contract ends.


  • Low initial deposit and fixed costs – Payment are spread out equally over the term of the agreement.
  • No capital investment – You don’t need to worry about the vehicle depreciating in value.
  • Tax-deductible benefits – Claim back a proportion or all of the VAT. (This depends on whether or not the vehicle is used entirely for business purposes).

Who is BCH for?

There are no eligibility limits on the industry or sector when it comes to BCH. As long as the business meets the minimum financial criteria, they will be able to fund their vehicles through BCH. It will suit businesses who don’t want to purchase their vehicles at the end of the contract.

Get a quote for business contract hire here.

Business contract purchase (BCP)

(You will not own the vehicle, but you’ll have the option buy at the end of the contract)

BCP is similar to BCH in that you pay an initial deposit, followed by fixed monthly payments. However, with BCP, you have the option to make a balloon payment at the end of your contract if you want to keep the vehicle.

When your contract ends you’ll have three options:

  • Buy the car by paying the final balloon payment.
  • Hand the vehicle back.
  • Part exchange for a new vehicle.

Who is BCP for?

BCP is often the preferred option for businesses with high-value vehicles because they don’t need to worry about their fleet depreciating in value.


  • Flexibility – If you decide you don’t want to own the vehicle anymore, you can simply hand it back when the contract ends.
  • New vehicles – Change your vehicles regularly. (Depending on contract length, this is usually between 3 and 5 years.)
  • Lower monthly payments – With BCP, your payments are usually lower than if you were purchasing outright because you’re paying off the depreciation of the vehicle, not its entire value.
  • Guaranteed future value – The balloon payment is agreed at the start of the contract.

Hire purchase (HP)

(You will own the vehicle)

With HP, you pay an initial deposit and then pay off the entire value of the vehicle in monthly payments. When the agreement ends, and all the payments are made, you will own the vehicle.

HP monthly payments may be higher than BCP or BCH because you’re paying off the full value of the car.


  • Get the vehicle straight away – Afford a vehicle you might not have been able to purchase outright.
  • No mileage limits – There’s no mileage agreement which means you’ll avoid excess charges.
  • Full ownership – After making your final payment, you will own the vehicle.

Who is HP for?

HP will suit businesses who want to make personalised modifications or adjustments to their vehicles. It’s the preferred option for fleets with lower-value vehicles where they don’t need to worry about depreciation.

Arnold Clark can look after your business, no matter how many vehicles you need, or how you choose to fund them. We’ll work with you to help you decide the best solution to make sure you’re getting the best possible value for money.

Contact us today to find out what funding method is right for your business.

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