Leasing is a generic term for funding a vehicle, it is basically an arrangement where customers fund a car or van for a specified period and preset mileage by paying a fixed monthly instalment to the Finance company. 

Leasing is often described as Business Contract Hire (BCH), Personal Contract Hire (PCH), Contract Purchase (CP), Personal Contract Purchase (PCP),  Finance Leasing (FL),  Hire purchase (HP).  All of these terms describe the various forms of a lease and all have differing benefits.

Talk to us if you are unsure of which form of Finance is best for you….

Contract Hire is the only off balance sheet car leasing option.  It is VAT recoverable with no risk of ownership. Optional maintenance packages are available. 

Contract Purchase is a vehicle leasing option best suited to companies who cannot claim VAT and wish to have an option to purchase at the end of the lease. Optional maintenance packages are available as per contract hire.

Lease Purchase is a car finance option is similar to contract purchase, however the balloon payment at the end of the contract is the hirer's responsibility. You can choose to have no balloon payment which would be basically the same as a Finance Loan.

Finance Lease is an on balance sheet car leasing option. It is VAT recoverable, and suited to those who wish to take the risk of ownership as the hirer is responsible for the balloon payment.

Each of the different types of lease has its benefits.  In simple with Leasing you don’t have the outlay of a large amount of cash into a depreciating asset, so your money could be put to better use.

Lower Monthly Payments
Because you only pay for the portion of the vehicle that you actually use, your monthly payments can be 30%-50% lower than for a purchase loan for the same car over the same term. As your monthly payments are lower, you are able to get more car for your money and drive a new vehicle every two to three years.

Fewer Maintenance Headaches
The majority of people like to lease for a term that coincides with the length of the manufacturer's warranty so that if something goes wrong with the car, you have peace of mind that the repairs are always covered.  You therefore only have to cover the cost of a routine service according to manufacturer’s guidelines unless you take out the optional service plan and include it within the lease.

Lower Upfront Outlay
Most leases require a small deposit which makes getting into a new car more affordable and frees up your cash for other things. However, you can choose to make a larger down payment, or trade in your old vehicle, to lower your monthly payment amount.

No Used-Car Hassles
With most leases, the headaches of selling a used car are eliminated. When your lease ends, you simply hand it back to the leasing company and walk away, unless you decide to buy it or trade it in.

Not necessarily – yes there are certain advantages for businesses to take a vehicle lease but consumers can also take advantage of the potential savings available. You can do either a Contract Hire or Contract Purchase on a personal basis and again in most cases the lease will allow you to fund a new vehicle of higher value than you can normally afford.  The only difference is that a personal applicant will be unable to reclaim any of the VAT.

This is a term commonly used with Personal Contract Purchase schemes – It basically means that the manufacturer or dealer will guarantee to give you that amount back for your car if you trade in for another vehicle with them.  Be wary with this though as the MGFV isn’t valid if you go to another dealer. You would be much better looking at a PCP that has a low balloon payment as your car should be worth more than the final payment in most cases. Also check that you can hand the car back without penalty if the car is worth less than the final payment..

If you take a Contract Hire lease then Road Tax is included within the contract. Should you go for Contract Purchase or Finance Lease then you will have to cover the cost after the first 12 months as the vehicle will be registered in your name and you will hold the V5 Document. 

Unless you take out the Optional Maintenance package then you will have to cover the cost of the routine servicing according to the manufactures guidelines.

You would basically treat the vehicle as it is your own so you would have to insure it under a Fully Comprehensive Policy.  With all leases you would be shown on the V5 Document as either the ‘Registered Owner’ or ‘Registered Keeper’ of the vehicle – you shouldn’t therefore have any problems with insurance companies.

It may well be worth looking at GAP insurance when you take on your leased vehicle as there is a chance that in the event of a total write off after an accident you may find yourself left with a shortfall between the Leasing Company Settlement and Insurance offer.

To find out more about GAP or just get an insurance quote then Switch can recommend Premia Solutions Ltd on 0870 757 1680 - ask for Rob Williams.  If you mention Switch they should give you a special offer rate.

One of the major benefits of leasing is that your costs are predetermined for the term of the contract.  If you opt to take out a Fully Maintained contract then basically the only thing you need to do is insure and fuel the car as all servicing and tyres are included.

All the cars we supply are delivered FREE OF CHARGE to anywhere in mainland UK and are supplied directly through the main dealer network.

When you take out a contract it will be based on an expected annual mileage and should you exceed the specified contract mileage when you hand the vehicle back then there will be an excess mileage to pay.  This figure is pre-determined by the vehicle itself and can range from 3p up to 30p per mile but you would be advised what this is before signing a contract.

The maximum contract Mileage for any Lease is 150k over the Term of the contract. So either 3yr, 50k per annum or 2yr, 75k per annum for example.