When it comes to getting a vehicle you can use privately or for your business, you do have plenty of options out there. You can opt to buy a vehicle, which is the most obvious choice, but this often comes with a high deposit and high monthly payments, along with worries about the vehicle’s depreciation and maintenance. You can also opt for a hire purchase deal, which allows you to drive the vehicle for a time and then buy it once the term has ended. But there is another kind of contract that has proven lucrative for plenty of business owners and personal customers, and we’re talking about vehicle leasing or contract hire agreements. But is it the perfect fit for you? Here’s how you can determine if vehicle leasing is the ideal choice for your needs.
A look at the top advantages
You need to work out if vehicle leasing or contract hire is the best deal for you because you don’t want to end up stuck in a two- or three-year contract that doesn’t benefit you in the end. Of course, just like other options, vehicle leasing will have advantages and disadvantages, but here’s a look at the top advantages:
- It usually comes with the lowest monthly payments and the lowest deposit compared to other deals for brand new vehicles, especially in regard to luxury or high-end models
- The vehicle you lease will often be covered under the warranty of the manufacturer for the entire deal’s duration, so you don’t have to worry about maintenance
- Most contract hire and leasing deals will also cover road tax, and it may also include breakdown coverage. Some firms offer servicing as well
- You don’t have to worry about the loss of value of the vehicle once the term ends, because you can just give it back to the leasing firm
- The deal itself is straightforward and simple, with no complex paperwork and background checks. You can just pay your monthly fees and return the vehicle once the contract or agreement ends
Some considerations on vehicle leasing
As mentioned, vehicle leasing comes with certain considerations, and if you can live with these considerations, then this might just be the perfect deal for you. For instance, you will never own the vehicle – you will just be able to drive it for a specific duration. Also, the monthly payments for the contract may be quite low, but you will not get the cashback once the vehicle is returned to the leasing provider. This is precisely how renting a flat or house works.
You also have to consider that the mileage per year may be limited – there is a set mileage limit per year and you have to stay within this limit if you don’t want to pay a fine for the miles you exceed. But here’s one piece of advice: if you don’t want to pay a fine (which is usually 10 pence for every additional mile) for extra mileage, it’s best to set your mileage limit higher at the beginning of the term. Of course, you also have to make sure not to damage the vehicle, because if you damage it beyond the normal wear and tear, you will have to pay for the damages, too. But as long as you’re careful, it should be a worthwhile deal.