Are you considering leasing a car in the UK? If so, you`re not alone. Every year, thousands of Brits opt for car leasing or contract hire as a way to get behind the wheel of a new car without having to fork out a large sum of money upfront or commit to a long-term finance deal. In this article, we`ll take a closer look at car leasing and contract hire in the UK and what you need to know before you sign on the dotted line.
What is Car Leasing?
Car leasing, also known as personal contract hire or PCH, is a type of car rental that allows you to use a vehicle for an agreed period of time, usually between 1-4 years. You pay a fixed monthly fee for the duration of the lease, which covers the car`s depreciation and any additional services such as maintenance or roadside assistance. At the end of the lease, you simply return the car to the leasing company and can choose to lease another car or walk away.
What is Contract Hire?
Contract hire is similar to car leasing but is primarily aimed at businesses rather than individuals. It works in the same way as car leasing, but the leasing company will typically offer more flexible terms to suit different business needs. With contract hire, your monthly payments will usually be lower than with car leasing, as businesses can claim back the VAT on the monthly payments.
Pros and Cons of Car Leasing and Contract Hire
One of the main advantages of car leasing and contract hire is that you can drive a brand-new car every few years without having to worry about selling or trading in your old car. This means you`ll always be driving a car that`s under warranty and has access to the latest technology and safety features. Another benefit is that the monthly payments are usually lower than with traditional finance options, making it easier to budget for your motoring costs.
The downside of car leasing and contract hire is that you`re essentially renting a car, which means you`re not building up any equity in the vehicle. If you`re someone who likes to own their car outright or prefers to trade in their old car to offset the cost of a new one, then car leasing might not be the best option for you. Additionally, there may be restrictions on the number of miles you can drive during the lease period, and you`ll be charged for any excess miles you do.
Choosing a Car Lease or Contract Hire Company
If you`re considering car leasing or contract hire, it`s important to choose a reputable company that offers fair and transparent terms. Look for companies that are members of the British Vehicle Rental and Leasing Association (BVRLA), as this ensures they adhere to strict codes of conduct and service standards. You should also read the terms and conditions carefully before signing the lease agreement, as this will outline any additional charges and restrictions.
Final Thoughts
Car leasing and contract hire can be a great option for those who want to drive a brand-new car without committing to a long-term finance deal. However, it`s important to weigh up the pros and cons and choose a reputable company that offers fair and transparent terms. With careful planning and research, you can make the most of car leasing or contract hire and drive away in the car of your dreams.
