| Individuals often complain that buying a vehicle is a | | | | customer is that, firstly, unlike the terms of a finance |
| huge drain on their finances. A smart alternative to | | | | purchase scheme, there is no large deposit or final |
| buying is to lease a vehicle via a contract hire | | | | payment required. A relatively modest two or three |
| agreement. When buying a vehicle, there are all sorts | | | | months worth of payments is all that is usually needed |
| of hidden costs that the consumer must contend with, | | | | to secure the contract. |
| from tax to insurance. Maintenance is also a key issue | | | | Secondly, the monthly lease payment itself is also likely |
| when owning a car, one of the biggest disadvantages | | | | to be cheaper than a finance purchase repayment. |
| car owners face is the depreciation of the vehicle | | | | This is because, unlike finance purchase repayments, |
| over time. | | | | lease payments are not designed to repay the entire |
| Under a contract hire arrangement, a customer | | | | outset value of the vehicle, but merely the amount it is |
| chooses a brand new make and model of a particular | | | | likely to lose in depreciation over the two or three year |
| vehicle. However, rather than the customer purchasing | | | | contract hire agreement period. |
| this vehicle, it is instead bought by a vehicle leasing | | | | When the two or three year contract hire period is |
| company, which in turn leases the vehicle back to the | | | | over the vehicle is returned to the leasing company |
| customer. | | | | and the customer starts a new contract hire |
| What makes contract hire so attractive to the | | | | agreement with a brand new vehicle. |