So if you aren’t paying cash, you’ll be entering into some type of finance agreement.Whether that be a straight loan, mortgage extension or a Hire Purchase agreement.
Therefore, if you’re already financing your vehicle purchase, considering a lease is the next sensible move, as leasing is simply a type of vehicle related finance.
There’s a lot of misinformation about leasing and at VehicleFlex we would like to enlighten you. One if the most common myths of leasing is that it’s inflexible and there are expensive exit fees. So is that true?
Well, like anything in life, it’s a balance between security and flexibility. When you take a mortgage out, you decide on what type suits you; interest only, repayment, tracker, or fixed. Each carries different levels of risk, security and flexibility. Each will have varying levels of penalty for exiting early. Leasing is no different.
We offer 6 types of Lease as well as Long and Short Term Hire. Our ethos is to work with you to strike the right balance between flexibility and security. Providing you with an agreement that’s not only competitive, but gives you the comfort that it fits your circumstances for the duration of the agreement.
Popularity of Leasing
Leasing products have long been popular with corporates, who take advantage of the various tax and accounting benefits. However, in the last 5 years, there has been a big increase in the popularity of leasing in both smaller businesses and private individuals.
So what has driven this increase? There are two key drivers to the increase:
Mind-set – the mind-set of owning assets is changing, with people becoming more used to paying for usage on a monthly basis and refreshing the product every few years. A typical example would be smartphone contracts.
Discount levels – the discount levels available on lease products are normally much higher than those available to purchase. This means that the costs to lease are very competitive.
You can segment the different lease options in two ways. Firstly, you segment by customer type i.e. Business users or Private Individuals.
The products are then split into two key groups, which we term “Ownership” or “Usership”.
- An “Ownership” product, is one where you will or have the option to purchase the vehicle at the end of the agreement.
- A “Usership” product, you are purely paying for the use of the vehicle for the term of the agreement and will never own it.
Pro's & Con's of Lease Types
What are the main things to consider when deciding whether to buy or lease?