Have you ever fancied driving something a bit more glamorous than the normal humdrum saloon? Maybe you’d like to try out something a bit more upmarket, with a hint of exclusivity and desirability? Well, you might think that the dream of getting your hands on a premium motor is just that little bit too much out of reach due to budget restrictions – however, you might be wrong. Car finance options exist to make those dreams a possibility, and are well worth considering before you give up completely.
Leasing a car can be a very effective method of car finance. It’s been in use in the business world for many years now – although it’s often called contract hire when it comes to commercial use. Basically, contract hire packages are a great way for a business to provide company cars for its employees. As they’re leased, they don’t go on the balance sheets, don’t depreciate and lose the company money, and offer the business all sorts of tax incentives.
When it comes to non-commercial use, the arrangement is called car leasing. Car leasing has become one of the most popular forms of car finance in the UK in recent years, and works in a similar fashion to hiring a car on holiday. You lease the car, use it for an agreed period of time then, when the time is up, you hand back the keys. A monthly fee is paid for the car by the customer, typically over a three or four year period. After that, you give it back to the car leasing company and drive off in the latest model.
While some people would worry about not owning the car themselves, it’s worth remembering that not owning the vehicle has its own advantages. Firstly, it makes cars that are traditionally more expensive a lot more affordable. Car leasing makes this possible because the leasing company calculates how much a car will lose in value over the time you use it, and then setting your monthly fee to cover this number. Since posh motors like Audis and BMWs lose less money than most average cars, the monthly repayments are lower if you choose to lease them.
Some people may also argue that a second-hand car would be a better choice if you need to update your car and want to save some money. While a second-hand set of wheels might be cheaper to buy than a new car, it probably won’t have comforts such as a warranty, which will look after anything that goes wrong with a new car. An older motor will most likely cost more to tax and, being older, will need more maintenance and replacing of worn-out parts.
Car leasing and contract hire, on the other hand, will give you cheap motoring bills with all the advantages a new car has to offer. On top of that, a new car is less likely to let you down, will be bang up to date with the latest gizmos and gadgets, and will cost less to run. They’re both car finance options well worth thinking about.
Tags: car finance, car leasing, contract hire