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Car Leasing is one of those terms that you might have come across and recognise but don't actually realise what it means along with the associated phrases such as Contract Hire, Lease purchase and Lease hire.
Well a Car Lease is a form of vehicle finance that allows the user to pay the lender involved - for only the portion of the vehicle that they use it. In that we mean that a monthly repayment is made for the duration of a contract and at the end the keys are simply handed back, the car or van is collected and inspected and providing the condition for its age is reasonable there are no further payments made. This works in this way because at the start of the Car Leasing agreement the finance companies Lease team will calculate the future value of the particular motor at the end of the required term and so be able to work out how much they need to charge to allow the deal to go ahead. By working several years in advance there is a possibility that the value could change - making the vehicle worth less than anticipated, yet the customer has already agreed the rate and so nothing changes. The depreciation is completely down to the funder and so it is a risk free way to drive a brand new motor and not have to worry about how much money is lost while driving it. Lets face it, the great majority of us dread having to deal with selling a car and having to advertise it etc and even if a part exchange is agreed many consumers do so reluctantly and often feel that the salesman takes advantage by offering a poor price.
The residual value isn't the only selling point to a Contract Hire deal as you will also receive the annual road fund licence every year included in your payments - making a lease an easy way to budget for the cost of motoring. With the typical car also brand new you get the added bonus of driving a vehicle that is covered by the manufacturers warranty in the event of mechanical failure, while road side assistance helps you avoid any potential problems should the car break down. If you are like most people in the UK too and appreciate the idea of driving a brand new car every couple of years this is ideal. At the end of the 2,3 or 4 year term all you need to then do is have a check on the Internet what particular deals are hot and offering good discounts, check the car is available and order your new one. If you time it right and everything goes to plan you could have your old car collected on the day your latest model arrives.
In the event that you are unable to get approved for the lender or deal of your choice there are also other options available such as Non Status Contract hire from companies such as MSG Cars - whereby you still get an acceptance in place if you have adverse credit on your file. Even with current credit scarcity seeming to take place in Europe on a regular basis there are still specialist lenders who look to offer terms to customer deemed as high risk for a premium over regular car lease prices.
