Advantages of contract hire and leasing over lending and buying. Compare buying versus leasing and seeing which is the best choice to suit you.
Contract hire and Leasing is an option for both business and personal users. There are other options available, let’s say paying for your car in cash or taking out a loan. People are realising that cheap car leasing deals can have many advantages over outright car purchasing.
Contact Hire vs Outright Purchasing
For a start, with contract hire you are not purchasing the car outright. There is no huge single outlay to record on the books. You do not have to find all of the cash in one go to be able to drive a car.
At the end of the period there are no disposal costs associated with getting rid of the vehicle when it comes to time to replace it. There are also no depreciation concerns to worry about between now and the end of the contract.
Contract hire vs Car Loan
With a loan you are still left with a lump sum payment up front as a deposit and quite often very high monthly interest rates. Through the duration of your ownership of the new vehicle you are paying for everything. Should the car be written off during that time you will need to continue paying for the loan, unless you have suitable additional GAP insurance to cover the costs.
With leasing, you know exactly what your monthly payments will be. Extras such as maintenance and vehicle excise duty will be included in the monthly fees.
You agree with the firm that you are working with for how many months your lease will last. You might want merely a couple of years or you may want to have the vehicle for a lot longer, it is up to you. Depending on your needs you might even want to include several extras, let’s say maintenance and car tax.
There are also other financial incentives for vehicle contract hire, especially if you are in business. For instance, the VAT element of the monthly payments could be simply reclaimed for VAT registered business.
Contract hire is a very good way of avoiding having to pay out the full price for a vehicle in one go whilst guaranteeing your monthly payments. And usually, at the end of the hire period if you need the car for a little longer you can extend the period of hire or even buy the car outright.
If you require assistance in finding a great car leasing deal please contact 1st4.