Are car leasing and contract hire the same thing?
Buying a new car is a big decision, especially now when times are hard and money is tight. There is a seemingly neverending supply of vehicles to choose from, not to mention all the different methods of payment. Of course you want to know you’re always getting the best deal, but sometimes it can be hard to negotiate the minefield that is the car market, and sort the good deals from the bad.
Because buying a car doesn’t have to be about paying all that money at once and settling for whichever is the best car you can afford. There are other options like leasing or contract hire, which usually mean you can get a better car for less money. So if you always fancied a Mercedes but didn’t think you’d ever be able to afford it, Mercedes car leasing could mean that you could walk away with your dream car right away, and pay it off in affordable instalments over an agreed period.
But finding the cheapest deals is not always that easy. Leasing companies offer loads of different options and it’s important to know exactly what you’re looking for to get the most out of your contract. A straightforward lease deal takes the total cost of the car, taking your projected mileage and usage into consideration, and splits it into equal monthly payments. At the end of the lease period, once the total cost of the car has been paid, ownership of the car usually transfers to the customer. Whether your dream car is that Mercedes, an Audi or a BMW, car leasing gives you a wider choice of vehicles that you wouldn’t necessarily be able to afford outright.
The alternative to leasing is to enter a contract hire arrangement. The main difference between contract hire and leasing is that the customer does not own the vehicle at any point but insead pays a fixed monthly hire fee, again calculated from the total worth of the car, the estimated future cost, and projected mileage. This option is often preferred by those looking for commercial vehicles as most deals have servicing and maintenance costs included in the monthly fee, so there’s no danger of getting hit with large bills if anything goes wrong. At the end of the contract agreement ownership does not pass to the customer but there is the option of renewing the contract and upgrading to a newer model, another reason this is the perfect option for people looking for commercial cars or vans. Some private owners might rather have a car they can call their own but there are personal contract hire deals available, as well as contract purchase deals. With contract purchase you have until the contract ends to decide whether or not to keep the car, for a previously agreed cost based on the car’s value for resale.
