It is an undeniable fact that cars are an expensive outlay which most people also see as a necessity. The problem is most people are unable to purchase a car outright, this means that they have to look for finance options or maybe look at taking a personal car leasing contract.
Cars can be seen as a volatile expense as it is virtually impossible to know how much it will cost you over your period of ownership – it’s hard to say how much the value will depreciate, and you never know when something might break and how much it would cost to get it fixed – and this combination can make a car purchase an unattractive prospect. But there is another option.
Personal car leasing is a great alternative for an individual that is looking to drive a new vehicle, but wants to be paying a monthly cost nearer to that of a used car on car finance. Some people think that leasing is only a viable option for businesses, but the reality now is that many individuals are looking at leasing as a great way to drive the car they want.
So just what is personal car leasing? Very simply put, it is car leasing for a private individual as opposed to a business. Leasing originated and gained considerable popularity with businesses and is currently considerably more common than private leasing. It allows businesses to renew their fleet of vehicles more often and with more ease, and as such is a highly attractive option. However, now private individuals are realising that they also can have a new car every few years, and often at a price which is more affordable than most would expect.
With personal car leasing the lease company buys and retains ownership of the car. An individual will pay a deposit, also known as an advanced rental, which usually consists of between 3 and 6 times the monthly payments. They then lease this car for a set monthly rate from the leasing company. At the end of the agreement, depending on whether the individual has the option to buy the vehicle or not, they will either pay a balloon payment or hand the car back to the leasing company. This provides the consumer with a huge amounts of flexibility and choice when they reach the end of the lease period.
Personal car leasing might not suit everyone. For people who know that they won’t drive more than a certain distance in a normal month it’s ideal, but for anyone who may have to drive long distances on a regular basis or who may do so with an unknown frequency, leasing may not be ideal. The main limitation of leasing is that you are limited to a set number of miles you’re allowed to drive without incurring extra charges, as the more miles a car is driven decreases the resale value of the car.
Also some personal car leasing contracts are restricted so you are not able purchase the car at the end of the agreement. This makes it vital to make sure you choose the correct type of leasing before you commit to the contract.
Find out more about Personal Contract Purchase
Find out more about Personal Contract Hire