Personal Car leasing
Personal car leasing is the cheaper alternative to buying a car
In years gone by many people would cash buy or take out a loan to get a new car, but now there is personal leasing which offers many advantages which many people prefer. With a personal contract your monthly payments and initial payments are generally lower than a loan.
When you buy a new car with a car loan, then the loan is for the full amount of the car. However, because of the way car lease payments are calculated you are only paying for the expected depreciation of the vehicle over the duration of your contract. This means that you are effectively borrowing less, therefore reducing the amount of the monthly payment.
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Types of personal contracts
There are two main personal car leasing options, personal contract hire and personal contract purchase.
Personal Contract Hire is very similar to business contract hire but the monthly payments include VAT which is not reclaimable. At the end of the Personal Contract Hire agreement the vehicle is returned to the finance provider.
Personal Contract Purchase also known as PCP is very similar to Personal Contract Hire but there is an option to buy the car at the end of the term if the customer wishes by paying the balloon payment which is calculated at the out set of the agreement.
Private users can choose whether to take a car with or without maintenance.
If a person chooses not to take a maintenance package then it becomes their responsibility to ensure that the car is serviced in accordance with the manufacturer’s specifications and not returned to the finance provider with inadequate tyres. Most maintenance packages provide complete servicing and replacement tyres which some people prefer so they have fixed monthly costs.
At the end of the agreement the car is collected by the leasing company who would asses the vehicle for any damage for which there may be charges. Sometimes the leasing company will allow an extension on a personal contract hire if it meets with their criteria assuming the vehicle is not too old at the time.
Employer’s car allowance
With more companies offering car allowances, personal car leasing has become very popular option to run a private car in today’s world of motoring. Personal leasing opens the door to changing ones car on a regular basis without the risk of depreciation and the worry of selling it. Some finance companies offer even greater savings if the applicant gets a car allowance.
1st4 leasing are personal car leasing experts who can provide further information upon request and answer any questions you may have in connection with personal car leasing.
Call us today on 0344 561 7199 to find out more about our personal car leasing offers.