Finding financing to have your car in the UK is somewhat difficult. This is why leasing exists. If you live in the United Kingdom, this text will inform you, how to make a car leasing?
What does car leasing actually mean?
Leasing is a rental principle which consists of renting the car for a fixed period and becoming the owner at the end of the contract. Leasing is financed by monthly payments fixed by the two parties at the time of the establishment of the contract. In general, the duration of the leasing contract is between 12 to 72 months depending on the conditions imposed by the lessors. In terms of price, it will depend on the rental period as well as the initial price of the vehicle. At the end of the contract, the lessee has 2 options, either buy the vehicle and pay an additional amount. Either return the vehicle and lease another or stop leasing completely.
What are the conditions to know before signing a leasing contract in the United Kingdom?
In fact, leasing or Rental with Option to Purchase is a type of consumer credit. The request is made to a financial institution known as donors. The latter will be the direct owner of the car. As a result, the monthly payments paid during the rental will reimburse the total value of the car. The duration is defined in the contract. It is not uncommon for a prior contribution to be requested in leasing. The latter is the equivalent of 5 to 10 % of the total price of the car. At the end of the rental, the deposit will be deducted from the purchase price of the vehicle. Landlords may also ask for a security deposit. This will be returned at the end of the contract, provided the car is intact.
For information, it is possible to terminate the leasing contract at any time, for valid reasons. However, the tenant will suffer a financial penalty in the event of early termination of the rental. The purchase of the vehicle is also possible at the end or even in advance in LOA. In the event of the tenant's death, the contract will terminate immediately.
What are the advantages and disadvantages of leasing?
The first advantage of leasing is that it allows you to pay lower monthly payments. It is also possible to change cars regularly according to the conditions of the contract. The tenant benefits from a manufacturer's warranty for the duration of the contract. Then, the amount of the monthly payments is fixed and determined in advance. The lessee's vehicle will not be seized by the courts throughout the contract.
However, leasing has a considerable selling price unlike car credit. Also, used car ads are limited.
