Understanding Contract Hire and Leasing Options
One of our frequent readers asked us to explain some of the specifics that pertain to contract hire and leasing in the UK. For example, our reader wanted to know why there are often drastically different price quotes for the monthly payment on the exact same vehicle. Why, for example, does a finance company offer a model of German car with a contract hire of less than one hundred and fifty pounds per month and a deposit of about five hundred pounds? Why does it ask nearly double that amount for the monthly payment on a hire purchase? We’re told that one option can be more economical than the other in terms of monthly payment. This is because the terms of the contract are substantially different. A contract hire plan can offer substantial tax benefits. One is not actually contracting for ownership with the hire. You might think of this is leasing. With a hire purchase, payments are typically steeper. This is because the business will take ownership of the car at the end of the contract term.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Sorry, the comment form is closed at this time.