Fancy a new car? One of the best ways if acquiring your new car is to lease - this option is growing in hugely popularity as it makes good financial sense, it’s also being used a lot in the business sector where many employees take a monthly allowance over a company car.
Leasing may be a good option for you - it’s very similar to renting a house. The upside is that you can usually get more metal for your money.
So how does that work?
You only pay the equivalent value of the car that you have agreed to use each month.
Almost every car depreciates by almost 50% when you keep it for three years.
The advantage is that when you lease a car you will only pay an agreed estimation of the vehicles depreciation. This value is always set prior to the contract agreement so that you know exactly what you have to pay.
Advantages
The big gain of opting to lease a car is that you could ultimately drive a new car every two or three years and pay as little as half the price for the pleasure of doing so.
If you’re in business it can be a great tool as when you arrive at meetings you want to look good and driving up in a new car will add to your appeal.
Another benefit is that you will not be stung by any monetary loss when the car is sold as you were only paying for it when you used it.
You’ll not have any headaches either when worrying over a warranty or an MOT because an average lease lasts for two to three years. This means the car is still under the manufacturer’s warranty and you won’t have to MOT it, as it’s not old enough.
Fixed payment maintenance is usually part of the deal (but do check your contract) so if you need any work carried out this is usually covered.
Remember to pay your road tax? On a leasing deal you won’t have to as the road tax for the duration of the contract as it is already paid for as part of the contract.
The leasing companies will usually get cars on better terms from manufacturers than the average customer and this is usually passed down to you which means you get yourself a better deal for your money.
If you circumstances change, don’t worry - as you can sub let your car that suits your new needs
What’s more you only pay tax on the part of the car you finance!
There are tailored products to suit you, giving you the option of how long you want to keep your vehicle, so that you’re not left in a contract you wish you’d never signed.
If you want leasing to be beneficial then make sure you search around for the best deals on www.contracthireandleasing.com and get the contract that suits you.
You can even subscribe to the site, you’ll be sent daily emails of the best leasing deals in the UK.
Ways to Lease
Personal Contract Hire
One of the best-rated schemes around is called Personal Contract Hire (PCH).
This offers private buyers or those that want to opt out of a company car scheme a good way of leasing a vehicle.
PCH allows you to drive a new or nearly new car for 1-5 years doing an agreed number of miles - Note that you’ll have to pay the VAT on a PCH.
It may save you money on traditional methods of car purchase and you can check the deals on http://www.contracthireandleasing.com/
Monthly payments are based only on part of the price of the vehicle for the period agreed.
Lease Purchase
This is an agreement to purchase a vehicle usually by monthly installments over the term agreed and then you make a final larger payment to take ownership of the car.
The final payment (also known as the balloon payment) is usually an estimation of the future resale value.
Business Contract Hire
This is the same as PCH (above)
This offers business buyers a good way of leasing a vehicle.
BCH allows your business to have a fleet of new or nearly new cars for 1-5 years doing an agreed number of miles .
It may save you money on traditional methods of car purchase and you can check the deals on http://www.contracthireandleasing.com/
Monthly payments are based only on part of the price of the vehicle for the period agreed plus the company can claim back 50%of VAT on a rental, which is a massive plus.
So what companies make good business sense?
Every year the leasing companies in the UK are named and shamed in the APD Landmark Fleet Operator Customer Satisfaction Survey.
The Survey is based on 12,000 responses from leasing and contract hire customers representing 1.1m vehicles.
In February Alphabet and Lloyds TSB Autolease were named the best in the business for pre- and post-sale customer satisfaction respectively.
The pre-sale category covers how firms handle prospective customers, from first contact and response to follow-up, communications and products.
The post-sale category, won by ALD Automotive last year, looks at the satisfaction of existing customers in categories such as communication, vehicle ordering and delivery, in-life services and invoicing.
Alphabet’s win is its third in a row, though it did share the award with Lex last year.
The Broker
The broker is independent and a specialist in car finance. The companies have backing from major financial institutions and can get a deal on just about any car that is available in the UK. The broker is usually best placed to check the market and get the best prices.
The Dealer
The dealer can get you a finance plan for any car on its forecourt. However this will usually be restricted to two or three makes.
The Manufacturer
The vast majority of manufacturers have a leasing division -from Ford to DaimlerChrysler. They do offer PCH but for the majority it is BCH that they cater for. The cars on offer will be restricted to the type of cars that the manufacturer produces.
We hope we have given you food for thought with our lowdown on leasing.
So the next time you’re looking for a car for personal use or you need a fleet of vehicles for the business - don’t rush in.
Look at the pros and cons of buying and compare them to those of leasing and make an educated decision.
Simon McBride
