Having a brand new vehicle is certainly tempting, and driving around in that new car model can save you from worrying about issues like breakdowns and repairs (at least for the first few years). But there’s more than one way to get a shiny new car, and car leasing is well worth looking into – not only if you want to save but also if you don’t want to deal with the problems associated with depreciation. If you want to take advantage of a sleek new vehicle but don’t have the funds for a big deposit or don’t want your car to eat up your savings, a vehicle lease or contract hire deal could be your best option. But you may have specific questions about car leasing, which is understandable. Here, then, is a list of top FAQs on car leasing – and their best answers.
- What is vehicle leasing or contract hire?
Vehicle leasing is not that different from renting a home or flat (or anything else, for that matter). If you rent or lease a home, you will have to come up with a deposit, and you can then use the property for an agreed-upon duration. For using it, you will agree to pay a fee per month. When the agreement ends, the property will go back to the property’s landlord. The same is true when you lease a vehicle – you have to decide on the mileage per year, and you will settle a monthly fee for the vehicle’s use, with a larger first payment to serve as the deposit.
- Can I get to be the owner of the vehicle?
You will never get to be the vehicle’s owner, and you will not be presented with an option to purchase it once the deal ends. It simply goes back to the lease provider. Once you return it, they will check it, and if you have damaged something, you will have to pay for it, just like renting a property. Of course, they will account for the usual wear and tear as well. If you go over the annual limit on mileage, you will also have to pay an extra fee.
- How do vehicle leasing and contract hire arrangements work?
You have the option to lease a vehicle from a leasing provider or a manufacturer, and many leasing companies now offer an online service, such as Diamond Contract Hire. The deal and the fee you pay per month will depend on the vehicle’s make and model, your mileage, and the length of the contract.
- Is leasing a vehicle cheaper compared to buying a vehicle?
Cars will depreciate, and they’re not an asset since assets will appreciate and not depreciate. So this is already a good enough reason to opt for a lease instead of a purchase. But if you like the feeling of ownership and would like to have a chance to sell the vehicle after a few years so you can get back a percentage of your money, maybe you can decide on another option. But if, on the other hand, you don’t want to worry about selling the vehicle once it has depreciated, vehicle leasing may be the best option for you.
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