Getting your next car is a big decision that has a ripple effect in other areas of your life, especially the finances. You will have to apportion part of your income to fueling that car, maintaining it, and purchasing insurance. It is why some people prefer leasing rather than owning the asset outright. A car lease is an affordable option, particularly for someone who cannot put down the deposit required when buying a new car. A few other advantages of personal contract hire can convince you to start looking for the best vehicle rental services to work with. It helps, though to understand personal car leasing before you begin budgeting for your next one, and the Intelligent Car Leasing guide is helpful in that.
How a Lease Contract Work
With a personal contract hire, you negotiate an agreement with the leasing company to own the vehicle temporarily. At the end of the contract, you will return it and if necessary, get another one. The maintenance and repair services required can be part of the contract if you wish, which contributes towards your monthly savings. It means that as you budget for the car ownership, you can account for the maintenance costs in advance. The specific terms of a personal contract hire vary from one company to the next, but it is possible to negotiate favorable ones. When returning the car, it has to meet fair wear and tear standards.
The Pros of a Personal Contract Hire
What makes a lease option better at owning the car outright? For one, the terms for leasing the vehicle are much more lenient compared to financing a new purchase. You can work out low repayments that will not ruin your monthly budget or get you into credit card debt. Because you get to return the car, you can try out different models and upgrade after every few months without the stress of having to sell the old one first. The contract holder does not have to fret about the car losing value as he/she would with outright ownership.
What are the Risks
A personal contract hire comes with a few downsides like the charges incurred if a vehicle is too damaged upon return. The lease agreement provides information about the condition that a car should be in when you return it. Ending the contract earlier than agreed can also result in monetary penalties, so one should ask about this.
What is the Eligibility
You have decided that a personal contract hire is a more practical way to own your next car but is it for you and do you qualify? The requirements differ with rental companies. Intelligent Car Leasing, for example, requires a potential lessee to be 21, have a valid UK driving license, an address history that is more than 3 years old, 3-year employment history, and the credit rating should be good enough for the application. Most of these are basic across the industry, but the credit rating specifics will depend on the leasing company.
For an eligible applicant, the car leasing process is a simple one that will have you driving your next car in a matter of days.