I like most people until recently anyhow, thought car leasing was for big companies and sales reps. I thought they were only available to people who were VAT registered and had a genuine business, thus having a reason for needing to finance a car in a certain way. Lastly I thought there was only one kind of lease available and that was contract leasing. Until I was recently re-educated by a friend, I thought they paid a monthly sum and at the end of the three year of leasing, they simply handed the car back and started the process all over again. That is when people like me, normally swoop in and purchase an ex-lease car from an auction or local car dealer’s forecourt. They may have high miles on the clock however they are well looked after and are well worth the money. see it here
Well my friend has put me right on this subject once and for all, there are two types of car leasing available, first one is contract lease and the second is purchase lease, he went on to explain.
Contract leasing is better suited to the company user. They pay a deposit and follow this with thirty six monthly payments. The lease company remains in control of all the running logistics including road tax, insurance servicing and repairs. Even the tires are included in this lease package. The company’s driver simply puts the fuel in and off he or she goes. The servicing is done by the main dealer so at the ends of the lease period you have a car that has only genuine dealer parts fitted and fully serviced, however they simply hand it back and start again.
Purchase leasing is by far better suited to Mr. Joe Public, as at the end of the three or five year lease period you actually own the car. You pay the deposit and then follow that by the monthly payments. The difference with purchase lease is you are responsible for all the running costs including the main dealer servicing. For the duration of the warrantee the main dealer will repair any mechanical malfunctions. If you opt for the five year period, then after the end of the third year you will have to fund the repairs until the end of the lease period. It is important to note that the insurance has to be fully compressive and the car has to remain in good all round condition.
As in any finance agreement, it is paramount you make the regular payments or in extreme cases the car which is the security of the loan agreement can be taken from you. Ensure you have the funds to pay for your lease car and there should be no problems. I have redundancy insurance that covers any such loans, for a period of six months. This is a nice safety net to ensure I keep the lease car should I decide to enter in to a purchase lease agreement.