Tel: 01634 687070
By Adam Kyte
09-09-2015

What are the various car leasing options to consider?

When it comes to car leasing there are a number of options to consider, with various benefits and drawbacks associated with each. One of the challenges to leasing a car is choosing the right type of contract. So what will you opt for; personal contract hire, personal contract purchase or HP? 


It's no surprise car leasing has become incredibly popular around the UK, with the price of a new car stretching into the tens of thousands. Instead, leasing offers the opportunity to drive around a new release at just the fraction of the cost as you're only charged the depreciation value. So, if you've come to the conclusion that a car leasing deal would be the perfect solution, take a look at the various leasing options below. 


Personal Contract Hire (PCH) 

With a Personal Contract Hire agreement, you'll have fixed monthly payments to make that are based on the rate of the vehicle's depreciation. What is the depreciation? The difference between the car's value now and what it'll be at the end of the leasing contract. This takes into account various factors such as age and mileage. There are significant benefits for choosing this leasing option too, including:

  • Have the opportunity to drive a new car every few years, without the hassle of warranties or selling on after the contract
  • Pay a smaller deposit and lower monthly payments than by purchasing your own vehicle
  • Enjoy fixed monthly payments and even include extras such as maintenance and road tax into the deal
  • Businesses can claim back up to 50% of the VAT.
If you're interested in a Personal Contract Hire deal, why not check out the range of options at Autograph Contracts. 


Personal Contract Purchase (PCP) 

For those who would rather not hand the car back after the leasing contract comes to a close; the better option would be a Personal Contract Purchase. In theory, this option works similarly to that of a PCH. In the same manner, you'll pay a deposit and regular monthly amounts. It's only at the end of the contract where the difference is stark. Rather than handing the vehicle back and taking out a new lease, you'll instead make a balloon payment to keep the car. This final payment is calculated at the start of the lease. With the PCP agreement, there are various benefits to consider too and these would include:

  • Fixed monthly payments to help you better budget your finances
  • Small deposit and low monthly payments compared to that of car finance options
  • The flexibility to defer payments and increase your final balloon fee
  • You aren't contractually obliged to purchase the car and if you prefer, can walk away from the deal.
If a Personal Contract Purchase agreement is of interest, why not take a look at the brilliant options available with Autograph Contracts today. 


Hire Purchase (HP) 

Last, but certainly not least on your car leasing options, would be the Hire Purchase agreement. Again, this form of leasing works similarly to the two above but with some minor alterations to the deal. As usual, you'd be responsible for paying an upfront deposit and making regular monthly payments on the vehicle. With HP contracts you'll agree to purchase the car at the end of the deal, but won't officially own it until all payments have been made. AutomotiveCarInteriorDriver800

So what are the benefits to Hire Purchase?  

  • The opportunity to drive a vehicle you otherwise couldn't afford straight away
  • The chance to own a more prestigious vehicle once all payments have been met
  • Better interest rates as the finance taken are instead secured against the vehicle.
Just be aware that with a HP contract you'll be unable to sell the vehicle until all payments have been made. If you fail to keep up with these, it's possible for the creditor to repossess the vehicle. And there you have it; three excellent leasing options to driving a brand new car at just the fraction of the price. View our current leasing deals here.




Keywords: