The car leasing arrangement has worked for a good number of people, and it is certainly one of the – if not the – cheapest options you can find if you would like to have a new vehicle without paying a hefty price. Since you don’t purchase the vehicle, you don’t have to pay its full price and instead choose a monthly payment that works to your advantage. You have to pay an initial deposit, but it works out since you don’t have to get a loan or other financing to drive the vehicle you want.
All you are doing is essentially renting the vehicle for a set period, and at the end of this period, you can just return it to the lender, and you’re set (provided, of course, that it doesn’t have any damage or you have not exceeded the annual limit of miles, for which you will have to pay or be charged a fee). But what other aspects should you consider when signing a contract hire agreement? Here are the top vehicle leasing FAQs and your most important questions answered.
- How much will my monthly fee be?
With contract hire deals, you will pay an initial deposit and then a set fee for every month of the lease contract. Contracts can run from two years to four years, and the higher your deposit, the lower your monthly fee can be. The precise value will depend, however, on your vehicle’s make and model. To give you a better estimate, a standard hatchback can be leased for around £120 per month, with the deposit around six to nine times the monthly fee.
- What happens once the lease has ended?
It’s simple: the vehicle will simply be collected by the lender once you have arranged for it to be picked up. It’s worth noting, though, that you may be able to extend your deal, and you can contact the provider to find out; who knows, you may even be able to get a discount since it’s already an older model.
Once they collect it, the provider will inspect it, and if there is damage beyond the usual wear and tear or the mileage limit has been exceeded, you will have to pay for repairs or be charged a fee.
- How long does the process take?
When you have chosen your preferred deal, your order will then be processed, and this includes checking the paperwork and your credit rating. The process can take just a few days, but you will have to see if the vehicle is available. Vehicles in stock can be delivered in just a few weeks, while a factory order can take several months.
- What will happen if I do not pay the monthly fee?
If you think you might miss a monthly payment, always get in touch with the provider. If they know you are having difficulties, they may be able to offer an alternative and more affordable plan. If you miss one payment, they will probably contact you to see what’s going on. But if you miss more than one, you may be marked in default, and they will take the vehicle back. You may also acquire a default on your credit rating, so it’s best to settle it right away if repayment becomes an issue.
Image attributed to Pixabay.com
