Financing your next vehicle is almost always a difficult time. The benefit of buying new means that you can customise the vehicle to your needs, but most of us don’t have the cash to buy new. Similarly, it can be difficult to find the exact model and feature set car you were looking for on the used market. Leasing a vehicle is a third way of financing your vehicle, though, and depending on your circumstance it may be the ideal solution for you.
How Does It Work?
There are two main forms of leasing vehicles: contract hires and contract purchases. The former is the most popular choice as it allows you to choose between a large array of vehicles, even exotic makes and models, while paying on fixed monthly plan, usually structured over two-to-four years. At the end of the contract you simply return the vehicle to the lender and you can decide to take out another contract on a different model.
If you’d like to own the vehicle eventually, you should instead consider the latter option. This gives you more options once the contract comes to an end, such as paying a balloon payment to purchase the vehicle outright or trading the vehicle in at a dealership for another car. If the trade-in value is greater than the guaranteed future value, you’ll be able to use the difference as a deposit on another vehicle.
Business Use
If you’re lasing a vehicle for business use, you’ll typically be able to reclaim only 50% of the VAT back. This is because HMRC considers that it’s likely the vehicle will also be used for some personal use. However, if you can prove that the vehicle is being used strictly for business, it’s possible to reclaim 100% of the VAT. To learn more, take a look here for more information.
Personal Use
While leasing a car has primarily been the domain of businesses, websites like www.leasecar.co.uk offer options for both personal and business users. While you won’t qualify for the same kind of tax incentives a business user would, you’ll still be able to take advantage of the some of the other benefits. You’ll decide your annual mileage, contract length, and choice of vehicle, meaning you’ll never be stuck with a car you dislike for an extended period of time.
While leasing a car may not provide the full package for everyone, it does have its own unique benefits that are at least worth considering.