Finance

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You have reached your retirement or you�ve been retired for a while and you are thinking of getting a new car. Leasing seems like an attractive option because of the low monthly payments and the flexibility ensuring you aren�t tied down to a vehicle. The question is can you use your pension to lease a car?

So, you�ve passed your driving test and are looking for your first car. You�ve been told you should buy an old banger with high miles and is a decade old because it�ll be cheap to buy (it will also be expensive to tax and run and maintain). There is another way. You can lease a car.

Lease Purchase is a conditional sale finance agreement. It is similar to the PCP in terms of low regular monthly payments, however, at the end of a Lease Purchase agreement, you pay to own the car, rather than being able to hand it back. A Lease Purchase agreement can be taken out on any car, but it is ideal for those looking at premium models.

A Contract Hire agreement is the purest form of car leasing. You only have the option of handing the car back at the end of the agreement. When people talk about car leasing, they are referring to Contract Hire (CH). It works simply with you paying a deposit followed by a series of monthly payments for the duration of the agreement. These are commonly available on brand new cars.

Purchasing a car outright is a thing of the past. Many of us find it easier to purchase a vehicle through a finance option. Personal Contract Purchase (PCP) is the most popular finance option in the UK and for good reason. You pay a deposit, fixed monthly payments that allow you to budget effectively and have three flexible options to choose from when the agreement ends.

Hire Purchase agreements are finance options that allow you to purchase your car through easy to manage monthly payments. You can pay an initial deposit followed by fixed monthly payments. You will not receive any surprise increases, allowing you to budget effectively.

Car leasing is a complex issue and understanding it is the key to being approved. For you to lease a car, you need to understand that every aspect of the leasing process is variable. Each part affects each of the other parts. That could determine whether you are approved and what you will have to pay as a deposit, what monthly payments you will be paying or what percentage of interest you will pay annually.