An Overview Of How Car Leasing And Contract Hire Works
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It would seem that a surprising amount of people in the United Kingdom aren’t completely sure how car leasing works, so to give you a helping hand deciding if car leasing is for you, here’s a brief overview 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 a similar process, except contract are usually run for a longer period of time.
You would firsty need to think about the type of vehicle you want to hire, before specifying this to the leasing agency. You will need to tell them what sort of vehicle you need, what functions it needs to have, how many people it will need to hold, etc. etc. so that they can provide the right vehicle for you. Generally, you’ll then be presented with a financial proposal which you will need to agree to and 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 around your previous credit score & history, your job, current financial position, previous employment, 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’ve finished with the vehicle, you’ll be able to renew it, select a new vehicle (although this usually requires a new contract) or return it, ending the contract. When you do return the vehicle, make sure it is a decent condition, or at least comparable to the condition you took it in. You don’t want to end up paying a fortune for damages.
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