Lease4Less

Have You Considered a Car Lease?

When it comes to buying a new car, few of us have the funds to buy the vehicle outright. Instead, we have a number of finance options open to us including personal loans, hire purchase and car leasing plans.

Car leasing is already hugely popular in the USA, where one in four cars are leased. Now it is gaining popularity in the UK too, thanks to its many advantages.

A look at leasing plans

Personal car leasing broadly takes two forms: personal contract purchase and personal contract hire. The former is designed for those who wish to own the vehicle after the schedule of monthly instalments have been made, whilst the latter allows the vehicle to be handed back at the end of the contract term.

Business leasing is typically used for van leasing or the provision of company cars and commonly takes three forms: business contract hire, business lease purchase and finance lease. The former is suitable for most businesses and almost 50% of the fleet market use this option. VAT registered businesses can reclaim 50% of the VAT element of the monthly rental and 100% of the VAT on maintenance charges - and there are even greater incentives where the leased vehicle is a van, providing a company can prove it is used for business mileage only. Business contract hire is a popular option for van leasing as the vehicle does not appear on the company`s balance sheet and so there are no risks with depreciation costs as they are factored into the monthly payments.

Business lease purchase is designed for companies who want to own the vehicle as a business asset once the contract has been fulfilled, whilst finance lease is an alternative to contract hire that gives the leaser the option to repay the capital cost of the vehicle over a longer time period.