Car leasing options
Most car owners prefer to buy their car outright or buy it using a car loan but another possibility would be to either lease or hire the car. For many people leasing a car could turn out to be cheaper than paying off a potential high interest car loan and leasing is surprisingly hassle free.
If you lease a car you pay a monthly fee to use the car for a fixed period and mileage. At the end of the agreement you simply hand the car back to the leasing company. There are usually several leasing options available. One is what’s known as ‘personal contract hire’ where you as the leaser pay a fixed monthly payment based on the vehicle’s expected depreciation. The better the car holds it value, the lower your payments will be. This could make it possible for you to lease a car more prestigious than what you could have afforded to buy. The fixed monthly payments can also include a maintenance package. ‘Personal Contract hire’ however, doesn’t allow you to purchase the car at the end of the contract and if you exceed the agreed mileage limits it’s probably going to cost you. But if you’d like a brand new car every few years with fixed monthly bills, this might be an option for you.
Another lease option is the ‘personal contract purchase’ where you have the option of buying the car at the end of the lease. You’ll pay a deposit up front followed by lower monthly payments and the value of the car after the contract has expired is calculated so you know what you have to pay if you decided to take ownership of the car. If you decide not to buy the car you’ve got the option to hand it back.
A third option is ‘hire purchase’ where you pay a deposit up front followed by monthly payments until you have paid the car off and take full ownership. It will allow you to drive a car you normally couldn’t afford to buy outright but the interest rates might be high and there might also be an end of contract fee.
Whatever lease option you go for make sure you get one which is right for your needs. Leasing options are usually available through most dealers whether you fancy driving a BMW or a new Lexus.
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