A Brief Look At Leasing And Contract Hire
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It would appear that a considerable number of people don’t actually know how car leasing works, so to help you decide if leasing is the right option for you, here’s a quick rundown of the basics.
Essentially, the leasing process consists of paying to use a vehicle for a given period of time, without taking proprietry rights of it or paying the full retail value. Contract hire is very similar, with the only real difference being that the contract will usually run for a set amount of time.
Your first step would be searching for the car you want, based on what you will need the vehicle for (how many people it needs to carry, road types, fuel economy, etc), then going on to specify what type of contract you’re after (monthly, weekly, short term, long term, cost, etc). You would normally then be presented with several financial documents, which you will need to read carefully and then sign. Obviously something like an Audi contract hire is going to cost much more than a Skoda or an old Fiesta, so you’ll have to keep financial considerations in mind when choosing your hire car.
You’ll probably then have to wait from the financial underwriter to make a decision on your credit, which they usually do quite quickly. Their decision will be based on your credit history, current financial position, employment, references and previous loans, leases, etc.
Should you be approved for finance, you will then be expected to exchange documents, sign any necessary forms and take possession of your chosen vehicle. Usually you will not receive access to your selected vehicle until all financial paperwork is completed and properly exchanged.
Once you have finished with the car, you will have the choice of either renewing the contract, starting a new one or simply ending the contract and returning your vehicle. If you want to return the vehicle, you need to make sure you have followed all the contractual obligations and that the vehicle is returned in a reasonable condition, otherwise you could lose any deposit placed on it.
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