Understanding Car Leasing & Finance

Most of us cannot afford to buy a new car outright so we need to look at ways to spread costs over monthly payments. This approach basically gives us two options, finance or leasing. If you want to actually buy the car then you need to choose a finance option such as hire purchase or personal contract purchase. All dealerships will be able to provide quotes for these finance options although the latter comes under many different names. If you like to always have the latest cars and don't want the hassle of ownership, or the worry over your depreciating asset, then you may be better off leasing.

Car finance and leasing are both available to consumers and business customers - we can help you get cheap deals whether you are a company owner/driver or shopping for yourself.

LEASING

Leasing a car is an attractive alternative to buying a new vehicle for many motorists. When you lease a car, you are in effect taking it on a long term rental instead of buying. With contracts usually available between 1 and 5 years, you ensure you are always driving a relatively new model and when the contract finishes you simply hand it back. The rate you pay depends upon the contract term, your annual mileage, deposit paid and the future value of the car (estimated worth at the end of the contract). Leasing is available to both business and personal customers and usually comes with the option to include maintenance, servicing and breakdown cover in the contract. Road fund license is usually included in the price.

FINANCE

There are many ways to purchase cars. You can do it the traditional way, save up and pay for it in cash but not many people cannot afford to wait, hence the options available. Personal loans can be obtained from a bank, building society or finance provider (so long as your credit rating is good). Shop around for the best interest rate by comparing the APR. Hire purchase is another form of buying a car on finance. Instalments on the monies owed can be spread over 12-60 months and you usually have to put down a deposit. Personal Contract Plan (or PCP) is a variation on hire purchase and tends to result in lower monthly payments. Instead of paying for the car outright, you agree to pay the difference between its sale price and its price for resale back to the dealer, based on a forecast of annual mileage over the term of the agreement.