A vehicle that’s brand new is definitely tempting, but if you have your heart set on acquiring one and yet do not want to spend too much money on it, there is a solution for you. Car or vehicle leasing has been around for a while, and more UK consumers are opting for this viable solution if they want to drive around in a new vehicle while still saving their hard-earned money. But what should you know about vehicle leasing or contract hire arrangements? Here’s how vehicle leasing really works – and how it can benefit you or your business.
The Basics
Vehicle leasing is not that different from renting a house or flat. You are basically paying a deposit so you can use the vehicle for a duration of time, and during this time, you will also pay a monthly amount. When the agreement ends, you will return the vehicle to the leasing provider. It’s a deal that’s quite simple to understand. But vehicle leasing has some subtle differences as well. For example, you have to agree to drive within a certain number of miles per year, and you cannot make any major changes to the vehicle unless you request it before signing the agreement and getting the vehicle.
Vehicle lease agreements can last from 24 to 36 months, and your first payment or initial deposit is usually around three to six times the monthly fee. You will, however, have the option to purchase the vehicle at the end of the agreement, but if you don’t, it will simply revert to the leasing company. Once your deal ends, the vehicle will undergo an inspection, and if there is any damage beyond normal wear and tear, you will have to pay for it to be repaired. You may also have to contend with additional charges if you go beyond the mileage agreement per year.
How it Really Works
The arrangement works when you lease a vehicle from a leasing company or provider. The kind of deal you will get and how much you will pay is often based on the model and make of the vehicle you select, the number of miles you will drive per year, and how long the agreement lasts.
Throughout the entire agreement, the vehicle will be the property of the leasing provider. When you give it back to them, the vehicle will already have depreciated, and they will usually sell it. Since leasing providers often purchase multiple vehicles all at the same time, they can get more discounts than the average person buying just one vehicle, so their depreciation cost is not as high. For you, this means a better deal on a contract hire agreement since prices can be a lot more competitive.
How you can Choose One
A typical contract will last for two years to up to four years, so you may want to consider the duration of the deal in order to get a better price. There are plenty of deals that are now available online, and you can simply enter the model you are interested in or enter your preferred budget or agreement duration, and you can easily find the deal that’s best for you.
