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Posts Tagged ‘Car Lease’

Six Arguments Why Businesses Give Irritating Car Salesman A Miss And Go For Car Leasing

Friday, November 26th, 2010

In the UK, you will pop along the the local car dealer or shop online if you need a new car. It’s not often we might consider the car leasing option. Instead we dish out on loans and find ourselves in debt. Not many people in the UK know about the benefits of the car for lease option. However in the US, the leasing model is a very popular and successful one. So why is it people choose to lease cars rather than own them outright?

You have fixed monthly payments for a start. You pay your deposit and there are no more expenses. You’ll know exactly how much to budget for monthly.

You can expect a new car around every three years. You aren’t then left with a car with miles on the clock that has depreciated in value. You can shop it in for a brand new motor!

You can avoid depreciation costs brilliantly here as you can with van leasing. How many times have you paid a fortune for a car, and then you find out a few years later it is worth a fraction of the cost you paid- even if it is still in good condition. Lease cars avoid this situation. Imagine owing money to a loan company, and the loan doesn’t cover the value of the car!

Flexibility in life is paramount. When you come to sell a car, you really need to get a good amount back to cover the cost of the loan. Worse still, you may find you are caught in the loan long term, paying monthly for a car you no longer own. Car lease terms range anywhere from 6 months to 3 years, thus you have the flexibility to give the car back and cancel the agreement should your personal situation change. Perfect for if say for example you have kids, or move aboard.

Car leasing pricing is particularly attractive. There are half decent cars that start at as much as ten thousand pounds these days. Even then, they aren’t really going to impress your mates. If you took up an Audi car lease for example, you can drive away in a top of the range car that you’d never have been able to pay for outright, or perhaps even afford second hand! A car lease can before help your street cred!

Whenever I have gone shopping for a car, I’ve always struggled to not throttle the typical car salesman. The effort of having to negotiate and haggle the best price is painful. There is always the risk of being sold a dodgy motor. There is none of that with car leasing- you can find the best price for a specific model. Stop putting up with the dodgy car salesman. Why not give car leasing a try?

Car Finance Options Explained

Friday, December 19th, 2008


When buying a new or used car there are so many options now available. From personal loans to more specialist finance such as Personal Contract Purchase it leaves a lot of options for which to choose from. So what are all the options and which one is right for you.

Personal Contract Purchase

PCP is fast becoming a very popular method of car finance. You pay a monthly amount towards the purchase of the car and at the end of a pre-defined purchase period you can then choose pay a lump sum to buy the car or just return the car with no obligation. This style of finance is great for those people who like to change their car on a regular basis but do not want to pay the full amount for a new car.

Hire Purchase

This is the more traditional way to buy a car. You enter into a contract to buy the car over a certain period of time during which pay the car off in monthly instalments. At the end of this period the car is paid for and legally becomes yours. As a Hire Purchase is effectively a secured loan if you miss any payments then the seller has a right to repossess the car.

Lease Purchase

Lease / Credit Purchase is similar to a Personal Contract Purchase (PCP) in that a lump sum amount is deferred to the end of the agreement. This lump sum reduces the regular monthly payments and allows you to purchase a more expensive care than you thought possible.

Unlike PCP a lease Purchase offers no option to return the vehicle to the finance company at the end of the agreed contract period. It is up to the customer to settle the final balloon payment through additional finance, cash or part-exchange with the finance company.

Contract Hire

This is an agreement where a rental is paid in return for the vehicle over a period of 1, 2, 3 or 4 years. It is ideal if your business prefers to reduce its financial risk by not owning the vehicle and having to deal with the administration with new cars and also worrying about the value of the car over time.

As a business you may also be able to apportion some of the rentals towards tax relief if you are VAT registered. Contract Hire is also deemed to be an operating and is regarded differently to purchase contracts. As a result your business may benefit from other tax advantages.

Contract Hire payments are specific to the car you buy and are also dependent on the amount of mileage the car will do each year. A deposit will have to be paid and this normally amounts to 3 months of the contract hire payment.

Conclusion

There are so many car finance options now available it would be hard to see why you cannot get your hands on whatever car you wanted, within reason. If you don’t fancy taking on car finance then you can also look at secured or personal loans if you think it would work out cheaper or easier to make your dream car purchase.

By: Paul Hockney

About the Author:
Paul Hockney is an online loan expert who provides guaranteed finance tips and advice.



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