Introduction to Car Leasing

Car leasing is starting to become increasingly popular in the UK as a viable option to buying. This is Money suggest 61% of new cars driven off the forecourt are subject to a Personal Contract Purchase (PCP) agreement. Compare this to just 38% in 2006 and it’s easy to see just how much car leasing is on the rise. Essentially, the idea of leasing is similar to when you rent a property. You have full use of the vehicle over a set period of time, paying a monthly fee for the privilege. 

Leasing terms are normally fixed to a period of months, often between 12 and 60. It all depends on the car you’re leasing and how much you pay each month. With car leasing, you never own the vehicle during the term. At the end of the contract the car is returned to the leasing company and you then have the opportunity to commence a new deal.

If you want to be driving the latest car models, you’ll have two main options, to buy the car outright or to lease. Buying outright means paying a substantial amount of money upfront – This is the retail price. When leasing a vehicle, the retail price is replaced by the ‘residual value’. After all, the leasing company will receive the car back in the future, so the only figure that needs to be calculated is how much the vehicle will have depreciated in value over this time. This is how your monthly leasing payments will be calculated. It means you’ll pay significantly less each month than if you bought the car outright. Plus, you have the same privilege of driving around in a brand new car.

Once the contract has drawn to a close you’ll need to return the vehicle and are then free to start a new leasing deal. Which? explain that car leasing is already popular in the States and how UK motorists are coming on board with the prospects.

Continue to Chapter 2: Buying a New Car

About the Author: Autograph Contracts.

Autograph Contracts is a Car Leasing & Contract Hire broker. We provide great car leasing options for both business & individuals. Autograph Contracts is always willing to help customers find their perfect vehicle lease as well as providing great customer service & car leasing advice. For any further questions, advice or car leasing enquiries you can call them today on 01634 687070!