Car And Van Leasing Explained
Car leasing for many people can be a very attractive alternative to buying.
So, what are the potential benefits of leasing when compared to conventional new-car purchase loans?
The benefits of car leasing include:
- Lower and fixed monthly payments
- Leasing can give fewer maintenance headaches
- Lower initial cash expenditure for leased cars or vans
- No used-car disposal concerns with a leased vehicle
- Accurate budgeting with minimal administration
- No risk of depreciation
- Road Fund Licence included for full contract term
- Lower and fixed monthly payments when leasing a car or van
- Your monthly payments can be significantly lower than a purchase loan because you only pay for the depreciation of the car or van that you actually use.
Fewer Maintenance Headaches when Leasing
Most new cars have lengthy manufacturer's warranties and extended service intervals but an optional Full maintenance facility is available to provide complete peace of mind.
Leased Cars and Vans offer Lower Initial Cash Expenditure
Most leases require minimal deposits, which makes getting into a new car more affordable and frees up your cash. However, you can also choose to make a larger down payment to lower your monthly payment figure.
No Used-Car Disposal Concerns with a Leased Car
With leasing, the headaches of selling a used car are eliminated. When your lease ends, you can simply return it to the leasing company.
Explaining Business and Personal Contract Hire
Business Contract Hire (CH)
A fixed term agreement based upon a predetermined annual mileage.
Additional services can be arranged to include vehicle servicing and maintenance, tyres and exhaust replacements, breakdown assistance, and relief vehicle facility. The ability of the Funder to reclaim all of the VAT on the purchase price in turn, reduces the monthly payment in comparison with a purchase plan.
Benefits of Business contract hire:
- The rentals are tax deductible
- Initial payment requirements are generally low
- Pre-determined costs and fixed term smooth out cash flow
- Accurate budgeting with minimal administration
- Contract Hire can include maintenance and vehicle servicing
- No purchasing or disposal hassles
- No risk of depreciation
- Road Fund Licence included for the length of the contract
The contract hire company is able to reclaim all the VAT of the purchase price of the vehicles, which is reflected in much lower overall costs
Personal Contract Hire (PCH)
Personal Contract Hire is designed to provide private individuals with most of the advantages previously only available to businesses via Contract Hire.
- Initial payment requirements are generally low
- Pre-determined costs smooth out cash flow
- Rentals can include maintenance and Service Packages
- No purchasing, disposal hassles or risks
- No depreciation risk
- additionally the Road Fund Licence is also included for the life of the contract
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