Benefits of Car Leasing

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What are the Benefits of Leasing a Car?

If you’re looking for a straightforward way to finance your new car, where you can simply hand it back at the end of the contract period, and you have no desire to ever own the vehicle, then Car Leasing (or Contract Hire, as it is also known) may well be for you.

Car Leasing is a convenient, cost-effective and hassle-free way of financing a new vehicle, and there are many benefits of leasing a car whether you choose Business Contract Hire or Personal Car Leasing.

Here are the main Car Leasing Benefits:-

• Fixed monthly payments – easy budgeting of your motoring costs
• All Servicing & Maintenance costs and Roadside Rescue can be included
• Road Tax is usually included for the duration of your car lease
• Flexible terms and mileage allowance to suit your motoring needs
• A brand new car every 2 or 3 years, avoiding the costs of running an old vehicle
• Low initial outlay with Car Leasing compared to purchasing a vehicle
• You can often afford to drive a better car than if you were buying a vehicle
• No worries about the depreciation risks associated with car ownership
• Avoid the hassle of disposing of a used vehicle every time you change your car
• No need to trail around the dealers looking for the best part-exchange price
• Free delivery (and collection) of your new lease car to your home or office
• You are able to put your Personalised Registration Number on the lease car
• Lease Cars can be taken abroad on holiday or business
• Simply hand the vehicle back at the end with no further commitment
• Flexibility to extend the lease at the end of the term for a further 6 or 12 months
• You may be able to purchase your lease car at the end of the term if you wish

 

Additional Car Leasing Benefits for businesses

In addition to the above, there are further Benefits of Car Leasing for businesses:- 

• Up to 100% tax relief available on the Car Leasing rental payments
• VAT registered businesses can claim 50% of the vat back on cars (100% on commercial vehicles)
• All the VAT can be reclaimed on the Maintenance element of your car lease
• Contract Hire vehicles will not appear on your balance sheet, improving your accounts
• Improve cashflow by taking advantage of the low initial outlay with Lease Cars
• Fleet Management and Accident Management Services can be part of your contract
• Reduced administrative costs, especially when leasing cars with Maintenance

 

Disadvantages of Car Leasing

In the name of fairness, I should make you aware that despite all the Car Leasing Benefits I have listed above, there are also points to consider that might put some people off Contract Hire:-

• With most Car Leasing contracts, you never actually own the vehicle and are only ‘renting’ it
• It is a requirement of the finance company that you take out fully comprehensive car insurance to protect the vehicle
• If you underestimate your annual mileage, you will have an Excess Mileage Charge to pay at the end
• A Car Lease is usually a fixed term contract of 2 or 3 years, and Early Termination could be costly
• Lease Cars must be returned in accordance with the Fair Wear & Tear Policy of the finance company, or you may face a repair bill for any damage

On balance, it’s probably fair to say that the benefits of leasing a car outweigh the disadvantages, but you should always seek professional advice or speak with a good Car Leasing Broker before entering into a legally binding lease agreement.

 

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