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The Advantages of Personal Leasing Over Buying Outright

Buying a car is an enormous investment and often the largest that you will make behind buying a house. A large percentage of motorists will not be in a financial position to purchase the car outright and especially if it is brand new. As an alternative, personal leasing, or personal contract hire (PCH) is a fantastic option.

PCH Defined
So, what exactly is PCH? PCH involves hiring a car over a long-term period (usually 2 or 3 years) and making fixed monthly payments. Once you reach the end of the agreement, you simply return the automobile to the company.

Main Advantages
The key benefit of PCH is that it is an affordable way to drive a brand new automobile. Motorists often end up buying a used car as this is much cheaper, but the fixed monthly payments with leasing make it much easier to manage your finances. Once the agreement comes to an end, you can then simply take out a lease on an even newer automobile.

Another advantage that PCH brings is that selling the vehicle on and depreciation is not a factor. If you were to buy a new car outright, it would drop in value immediately once you drive off the lot. After 3 years, it could be worth just 40% of what you paid - this is an enormous financial hit if you were to sell it.

The terms of the agreement can be flexible when you use leasing companies like Car4Leasing. Often, you are able to change the price by altering the length of contract or altering the mileage limit (more on this below). The repayments are usually cheaper than personal contract purchase (PCP) as the payment is not towards owning the car and there is no balloon payment at the end. In addition to this, you receive the full manufacturer’s warranty, road side assistance is usually included and a tax disc is issued for the entire contract.

So, what are the drawbacks? The only drawbacks involved are that you never actually own the automobile. Also, there will be a mileage limit in place - if you exceed this, you will have to pay a charge. These issues should not be a problem for most motorists, however.

Overall, personal contract hire is a great way for motorists to enjoy the luxury of driving a brand new car every year. The repayments make it easy to manage your finances, plus you do not have to worry about the car depreciating in value.

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