Often
referred to as Contract Hire it is a method of acquiring
the use of a vehicle without having to pay for all
of it
It is called a lease because you never actually own
the vehicle, you rent it for a given period, normally
2 3 or 4 years.
At the end of this period you give the vehicle back.
The money you pay to the Finance / Contract Hire
Company is referred to as the “rental”
and is normally charged monthly.
The “Rental” is calculated on the following
basis.
- The interest costs relevant to the amount of money
borrowed (The cost of the vehicle)
- The depreciation the vehicle suffers during the
contract period. Clearly the more miles you travel
the more the vehicle depreciates
- Road Fund Licence
Maintenance packages can be added
to a personal lease, again these are calculated on
the anticipated mileage the vehicle will travel.
A maintenance package should allow for,
- All scheduled servicing,
- All remedial repair work.
- All tyres, batteries and exhausts (including catalytic
converters)
Relief vehicle facility
This is another package that can be added to a personal
lease (Personal Contract Hire PCH) and will provide
for a temporary replacement vehicle due to various
circumstances, eg breakdown accidents etc. again cost
is dependent on the level of cover chosen.
Breakdown Cover
Normally standard for the first 12 months of a vehicles
life, it can be extended to cover the remaining period
of a business lease / personal contract hire
The benefits of a Personal Lease ( Personal
Contract Hire PCH )
With a lease you only pay for the asset while you
are using it. So with a Personal Lease (Personal Contract
Hire PCH ) you are only paying for the value the vehicle
loses (its depreciation) whilst you are renting it.
You get to use the whole of the vehicle while only
paying for part of it
This is cheaper that buying it all at once.
Because the finance / contract hire companies buy
many thousands of vehicles, they buy better than you
or I can, these savings are passed on to you.
You do not have the risk of the vehicle disposal
at the end of its useful life. |