Taking a car on lease is definitely a more cost effective way to ‘own’ and use a car rather than car purchase. To add to this, various leasing companies are always tempting everyone with various cheap and best car leasing deals!
But you have to bear in mind that when it comes to car leasing London, there are different alternative ways of leasing a car. The minute differences in lease finance packages can seem quite mind-boggling to a first timer. But fret not as most of the differences in lease contracts boil down to the flexibility to retain the leased car at the end of the lease period. In essence, depending on the type of finance package you may have to either return the car or keep the car at the end of the lease or you may even get the flexibility to make your decision at the end of the car leasing London contract.
The basic type of car lease is contract hire. Here you find the best car leasing deals and then get to use the car after paying an initial deposit followed by fixed monthly rental payments. This is way lower than the monthly installments that you would pay if you were buying the same car. A residual value is predetermined for the leased car and you are required to return the car to the finance company at the end of the lease.
Lease purchase is similar to contract hire in terms of deposit and low monthly rentals. But there is a balloon payment at the end of the contract for finally taking ownership of the leased vehicle (based on the residual value). Here you can choose to go for refinance, part exchange or resale.
Personal contract hire is specifically suited to people opting out of a company car scheme or joining a new company that provides a company car allowance instead of a company car. Again you just have to make monthly rental payments and return the car at the end of the lease. On the other hand, if you are keen on buying the car at the end of the contract, then opt for personal contract purchase where you have to pay the residual value of the car at the end and it will be all yours!
Finance lease is another financing option (for businesses only) where the entire cost of the vehicle is spread out over the life of the contract. But the finance company still retains ownership of the vehicle and you will have to pay a nominal fee if you want to continue using the vehicle beyond the contract expiry.
Then there is a sale and leaseback arrangement where a business can actually sell its existing vehicle to a finance company and then lease it back for a monthly rental!
So when you are opting for lease, choose the right finance package that suits your needs!