A car is no longer a luxury, but a necessity. Today, there are more reasons why you need to have a car. A study shows that over 70% of employees and entrepreneurs in the UK have a car. However, did you know that about 60% of these cars are on contract hire and leasing agreements?
Most people prefer leasing than buying a car. If you are yet to decide, you’ve probably been comparing the benefits of leasing over buying. However, some circumstances may force you to lease a car.
Here are some reasons or circumstances when contract hire or leasing is the only option to get a car.
When you have a low monthly cash flow
Cars are very expensive to buy. You either need a car loan or to pay huge monthly payments to buy a brand-new car. This is the main reason why most people don’t own a car. If you have a low income, you can still ‘own’ a car by leasing your favourite model. The car you choose, however, depends on your financial means. Compare several personal contract hire leasing deals to find the best deal for you.
When you have saved a low down payment
Lease deals are very flexible. While you need a huge down payment to buy a car, leasing requires a low deposit to pick up a car. Some deals require no down payment, although their monthly instalments are higher. It is therefore important to note that the higher the down payment, the lower the monthly instalment.
When you don’t drive very much
A lease deal has a clause that dictates a mileage limit. Most car leasing companies will charge a certain percentage for additional miles exceeding the limit. As you negotiate a deal, make sure that you keep this factor in mind. Calculate on your own the number of miles you drive from home to your workplace. Multiply this by the number of workings day to determine the approximate distance you will have covered by the end of the lease.
When you need a business car
There is an added advantage of leasing a business car over buying one. When you lease, part of the car’s depreciation and other financial costs are directly deducted from your taxes. Make sure that you understand how the lease company calculates the tax deduction for a car you want to lease. The good thing about a business car is that you will pay a fixed cost per month to use the car for a certain period. There are no hidden costs yo surprise you!
Contract hire leasing is no doubt a great and easy way to have a car. You should understand the terms of the leasing agreement for a car before making a deal. You can consult a leasing representative to advise you on what you need for a smooth contract hire deal.
With the right leasing company and contract hire deal, you can enjoy worry-free driving for years!
