Car Leasing Blog

Regardless of whether you are a business or an individual looking for a new car there are a many varied and cost effective ways of financing the vehicle that will be able to meet your needs…..below are some simple explanations of some of the more popular options. …..Contract HireContract Hire is the leasing of a vehicle, normally to a vat registered business or company, for a set time and mileage at a fixed monthly rental. The monthly rental is determined by the cost of the vehicle, the period and mileage covered as well as the resultant depreciation. Maintenance packages are often included within Contract Hire agreements, but are not obligatory. …..Sale and LeasebackSale & leaseback can be used when your company already owns its own vehicles. Your fleet of vehicles could be purchased at an agreed realistic market value and then leased back to you through the funding method of your choice. This method removes any residual value risk for your company and would enable a cash injection into your business thus increasing your working capital. …..Outright Purchase Price CheckFor many people the concept of buying a car outright is daunting not least because the future value of the car is so difficult to quantify. The added complication of maintaining the car and the costs associated with this may make it a less attractive option. However if you are in the position of having cash to purchase your chosen vehicle outright and feel comfortable with the concept of servicing, taxing and disposing of it then shopping around for the best deal is important. Make sure you barter hard as somewhere a dealership will want to sell a car to hit its ‘target’ and will be willing to sacrifice profitability. ….Personal Contract Hire Personal Contract Hire, as its name suggests, is essentially the same as Contract Hire but for private individuals. If you want fixed cost motoring, or have opted out of a company car scheme then Personal Contract Hire could provide you with hassle free motoring without the residual value risks associated with traditional ownership.VAT is built into the monthly payments, but is not reclaimable by private individuals. Maintenance packages are usually available so that you don’t get any nasty surprises. ….Hire PurchaseHire Purchase is the traditional method of financing a vehicle with the vehicle becoming the property of the lessee at the end of the period. The monthly payment is determined by the amount of deposit paid, the period of the contract and the sale price of the vehicle. ….Personal Contract Purchase
Personal Contract Purchase (PCP) is a method of funding where an individual leases a vehicle for a set period at a fixed monthly charge. At the end of the contract, there is an optional balloon payment which the individual can pay to buy the vehicle otherwise they can choose to return the vehicle with nothing further to pay. The monthly charge is governed by the initial cost of the vehicle, the mileage covered, the period of the agreement and the estimated value of the vehicle at the end of the contract. In addition, features ranging from basic servicing to total vehicle management packages can be included if required. PCP being an alternative to Hire Purchase, the traditional method of financing, is also covered by the protections as set out in the consumer credit act.