Car leasing and contract hire are two options for purchasing a car. Although both seem the same as both are ways to get a car on easy monthly payments. However, both car leasing, as well as contract hire, have certain differences.
Car leasing and contract hiring demand are increasing in the UK. Since it seems the easiest option available to own a vehicle. If you also dream of owning a vehicle, you can search for car leasing companies near me.
To learn the difference between car leasing and contract hire. We need to understand both the terms separately then find out the differences. Read more to learn about car leasing and contract hire.
Car leasing has become famous over the past few years. This is a result of the increasing vehicular demands of the public worldwide. Car leasing is something that allows you to drive a new vehicle for a monthly fee for a certain amount of time (period of a lease). Once the lease ends, you will have to return the car. It’s good in one way that you can get to drive a new car. After the lease period ends, you may get a new one. You cannot own the car unless your lease contract gives you the option to purchase the vehicle from the dealer.
Contract Hire is a type of car finance and leasing option. This option is available to traders, partnership companies, and or limited companies. It allows a company or business to focus more on business operation rather than thinking about the financial risk of owning a vehicle.
Contract Hire is an agreement between two parties involving a vehicle lease. This often involves a certain period or mileage at a fixed monthly rate. The monthly cost is based upon the original cost of the vehicle. It also depends on the mileage that is to be covered within the decided periods. It typically extends up to two or three or four years.
Depreciation allowance is also included in the final cost of the monthly contract hire. The leasing party also offers monthly maintenance packages and include it within the contract. However, these things are optional, not compulsory. The monthly maintenance packages typically cover the whole car wear and tear for the decided period of contract.
Car leasing and contract hire might seem similar. However, car leasing is not available to businesses and partner companies. They are available to individuals. However, it is up to the leasing agent who they want to deal with. A tailored contract can be made in such cases.
Car leasing is mostly available for new cars. Whereas contract hiring is for both new and old cars. Car leasing is one way to drive any new car you like and then change when you get tired of that one. This allows you to easily shift to new vehicles without having the hassle of purchasing one and then selling it off. This saves you from losing any money in terms of vehicle depreciation etc.