Personal car leasing is a long-term fixed rental agreement and has become a popular finance product for those individuals who want a new car every 2, 3 or 4 years. This is suitable for those customers seeking to eliminate the financial risk associated with disposing of a vehicle and, if chosen, enjoy the convenience of a full maintenance service (known as funder-maintenance). It also enables individuals to benefit from competitive fleet discounts, which would otherwise be unavailable to them.
Contract hire is an easy way to drive a brand-new car on a “usership” style arrangement; the product is NOT designed for you to own the vehicle at the end of the contract. Some finance companies allow a lease vehicle to be purchased but this is very rare. Do note that the price you pay to own the vehicle will be calculated on the market valuation at that time and doesn’t take into account any rentals you may have paid. For individuals looking to buy a car, contract hire is not something which they should consider – a Personal Contract Purchase or Hire Purchase should be selected.
So what will a lease cost me? To calculate the price per month you need to supply the following information: