Just a little introduction It’s normal to get confused when trying to figure out what leasing actually is, but it’s not as difficult as you think. You get the option to upgrade from your current car and drive away in a newer and nicer one for fixed monthly payments – it’s as simple as that.
There are a range of different deals available with either a small or no deposit required. Do you have bad credit though? Fear not! Bad credit deals are also on offer for a range of different cars, so no one misses out.
Which path should I take? Personal Contract Purchase: This option is one of the most popular within leasing as it’s basically what leasing is all about. Once you’ve paid your deposit, you then start paying the monthly costs for a fixed period of time in order to pay off the car. A balloon payment is an option but not vital in which you pay the third of the cars value in order to own the car.
At the end of the contract, you get three choices: 1. Ownership of the car 2. Return the car 3. Trade in the car
Personal Contract Hire: With Personal Contract Hire, you drive the car of your choice for a fixed ‘lease period’ in which you pay the monthly payments. The thing with this option is that you will never actually own the car as it still belongs to the leasing company – you just get to drive it.
At the end of the contract, you can either: 1. Swap the car for another 2. Just return
Hire Purchase: A Hire Purchase offers the best of both and is a mixture of a loan and a lease. You pay a big deposit at the beginning in order to pay off a little bit of the car and then you pay the remaining off in fixed monthly sums. Once you’ve paid everything off, the car then becomes your own.
Lease Purchase: This option is pretty much the same as the Personal Contract Purchase but the difference is that you automatically own the car at the end rather than having the choice of a balloon payment. This is the perfect way to buy a car if you don’t have the money to pay the full amount upfront.
Why is leasing so good? There are a number of reasons which may persuade you to lease for the first time including: - Predictable monthly costs with low/no deposits available - You get the chance to frequently change your car to something better each time - Because you don’t have to sell the car yourself once you’ve done, depreciation isn’t an issue - Usually with leasing, you get repair offers included which makes the repair costs a lot cheaper - Leasing is incredibly flexible, as you can choose which path you want to go down and there’s bad credit lease deals available too.
There must be some negatives… Of course there are some downsides within leasing, but you’ve got to choose which outweigh and have the upper hand. - Having a set mileage can be a huge problem, especially for those who travel often as it costs extra for each mile you drive over the limit - With there being so many different options, this may cause confusion which can end up with you choosing the wrong path within leasing - You don’t always own the car at the end of the contract - There are loads of additional things which may cost you extra such as, wear and tear costs or if you want to terminate early
So, if you want to take a chance at vehicle leasing in order to get your next car, weigh up the pros and cons first to see if its right for you. Contract hire deals are also available.