Personal Car Leasing & Contract Hire
When it comes down to it, a car is probably one of the fastest depreciating assets you will ever spend money on. The reality is, as soon as you leave the dealership, it's a second-hand car with one owner, potentially knocking thousands of pounds off its resale value. Personal contract hire is a form of personal car leasing and not only enables you to minimise the effects of depreciation, but is both easily managed and cost effective.
Personal car leasing and personal contract hire deals are aimed specifically at private individuals and have risen massively in popularity over the last couple of years. This growth can be attributed in part to the growing number of businesses that have chosen to abolish their own company car schemes in favour of paying employees a monthly allowance that enables them to go out and finance a car of their choice. Personal contract hire deals are also popular with self-employed individuals, sole traders and small business owners.
Personal contract hire deals are structured in a very similar way to business contract hire deals with the key difference being the inclusion of VAT in the quoted monthly payments.
Opting for a personal leasing deal enables you to take delivery of a brand new car and run it for a pre agreed period. Though the car remains in your possession for the duration of the contract hire deal, you will never own it. Instead, you pay for your use of the car through an initial rental (usually three months payments), followed by a schedule of fixed monthly payments for the duration of the lease.
The amount you pay is determined by several factors including the term of the vehicle contract hire, the current and future value of the car and the number of miles you expect to cover per year. Payments are also affected if you decide to include an optional vehicle maintenance plan.
Advantages of personal car leasing
Low upfront payment
Fixed monthly payments
No interest to pay
Road Tax is included
Optional maintenance packages
Eliminates depreciation concerns
Factors of personal contract hire to consider
You never own the vehicle
Mileage limit will apply
There's no option to buy the vehicle
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