Acquiring a brand new car may not be on your list of requirements right now, but if you still need a vehicle – whether it’s for use in your business or personal use – you may want to seriously look at the benefits of car leasing and contract hire arrangements. The great thing about such a deal is that you can drive around in a brand new vehicle without worrying about expensive monthly payments and the car’s depreciation because all you have to do once the term ends is return the vehicle to the leasing company. But is it a good deal for your own precise needs? Here’s everything you should know about vehicle leasing and contract hire deals.
The gist of vehicle leasing: what it is
Leasing a vehicle isn’t much different from renting a house or flat. The only difference is that instead of renting a piece of property, you are renting a vehicle for a certain period. Property rentals will come with a deposit, and so will vehicle leasing or contract hire deals. You can then use the vehicle for an agreed term and pay a monthly fee for its use. It’s that simple, but to delve deeper into it: let’s say you go for a contract of 24 months. You would then make the first payment as a deposit that is usually six times the vehicle’s monthly fee. If you opt for a deal worth £150 a month, for example, then you may be asked to settle £900 upfront during the first month and 23 other payments per month of only £150.
You will never take ownership of the vehicle or have the option of buying it once the deal ends, and it will simply go back to the company from whom you leased it. They will then inspect it, and if there is any damage apart from the usual wear and tear, you will have to settle this as well. There is also a yearly mileage limit which you have to agree upon before signing the contract, so if you exceed this, you will also have to pay a fee.
A vehicle leasing or contract hire arrangement will usually last from two years to four years, although there are deals that are slightly shorter or longer, depending on the leasing firm. It’s worth considering your options with the contract’s length because it may give you a cheaper rate if you go for a longer contract (depending on the company, of course). But another way you can get a good contract hire deal and make the most of the arrangement is to determine your limit on mileage from the start. It would be better to set a higher mileage limit if you think you will be driving around a lot rather than end up paying extra fees if you go over the limit you have set.
You can also get a good deal by comparing different companies; there are plenty of companies offering such arrangements and contracts online so you can just search for the model you want and put in your budget and other details like the kind of car you require, and you’re sure to see plenty of choices in-store. Happy choosing, and good luck!