Leasing Options & Contracts
Business Car Leasing Contracts
Vehicle leasing has proved an attractive option for thousands of businesses in the UK and contracts are typically agreed over of period of time between 12 and 60 months. For businesses, an extra perk is that up to 100% of VAT costs can be reclaimed, saving plenty of money on your leasing contract.
Business car leasing works by paying a monthly rental fee for the vehicle. A set mileage will be agreed and it’s important not to exceed this. As part of the leasing contract, extras such as car maintenance may be included. This could include consumable items such as tyres and brakes.
Once the contract term comes to a close, the car is simply handed back to the leasing company. For car leasing, the major benefit is the opportunity to drive a modern vehicle for just a fraction of the cost of buying new. This vehicle can be leased for a pre-determined period of time on a fixed monthly rate. You can choose a car from any manufacturer and model in which the leasing company owns the vehicle for the length of the contract.
Many factors affect monthly payment rates, including the vehicle’s depreciation rate, mileage and additional services you wish to make the most from. You can include services such as breakdown and maintenance cover in your monthly payment.
You can read more about Business Car Leasing & Contract hire here.
Personal Car Leasing Contracts
Just as with business leasing, personal leasing allows you to choose a vehicle from any manufacturer and in effect, rent this car over an agreed time period. This serves as a much more cost-effective solution to buying outright, due to the depreciation new cars are affected by.
Once again, your monthly payments will be determined by a number of factors such as the rate of depreciation, the length of your contract and any additional services including breakdown cover.
The majority of those seeking a personal car lease choose to select full maintenance cover too as part of the contract.
There are a number of benefits for personal car leasing and below are just a few of these:
- Typically pay only a small deposit, equivalent to three months worth of rental
- Include extra services such as maintenance and breakdown cover into your contract
- Avoid losing out on thousands of pounds due to the rate of depreciation
- Drive a brand new car for just a fraction of the cost, whilst having access to a different vehicle every two to three years.
You can read more about Personal Leasing Contracts here.
Personal Contract Purchase
Another option for those seeking a personal lease is the Personal Contract Purchase (PCP). PCP deals are popular because of the added flexibility that’s available once the contract draws to a close.
When the contract is first agreed, a figure is calculated for the vehicle’s final value after the lease term. This is set according to depreciation rates and the mileage expected.
PCP contracts allow you use of the vehicle as with a normal lease. However, the major difference is at the end, when you have four options to consider:
- Purchase the car by paying the agreed final fee
- Sell the vehicle, whilst settling the money owed
- Return the car to the leasing company, with no more obligations involved
- Return the car and take out a new contract on a separate vehicle.
Of course, the benefits of a PCP contract speak for themselves:
- Only pay a small deposit
- Contribute low monthly payments
- Agree on a final valuation of the vehicle after the contract
- Extra flexibility to decide what you’ll do.
You can read more about Personal Contract Purchase (PCP) here.