Private leasing is a procedure whereby one rents a car to use it for a specific period of time and pays deposit plus a fee every month for the duration that he/she will use the car. After the agreed time, the owner can either purchase the car or return it to the company. There is the personal contract hire (PCH) whereby one gets the car of choice, pays the deposit then the agreed fee periodically and then after the leasing period ends returns the car. In this arrangement, one never gets the opportunity to be the owner of the car. Whereas the personal contract purchase (PCP) works the same way as the private contract, in this arrangement one is allowed to buy the car after the end of the leasing procedure.
Private leasing (Privatleasing is the term in Danish) involves selecting the favorite car, the period you want to lease the car for, mostly around 24 to 60 months and the payment term that is ideal for your budget and occupation. A car will depreciate as one uses it and leasing provides the best alternative to purchasing of a car.
What are the advantages of private leasing?
Private leasing allows one to drive different models around. It gives one the opportunity to ride on an expensive car that one would normally not afford. Your lifestyle is prone to be transforming every year due to a new car model. It allows one to have a long period of testing the mechanism of different brands for an eventual possible purchase. Leasing of the cars will also help a lot in saving some money since most agreements do cover the repairs costs.
During the leasing phase one is exempted from the road tax expenses since the car on lease is still on the company’s name and they pay for that. It also provides a chance for on to buy off the car at the end of the leasing period. The payment terms are regular and no chances of fluctuation of the monthly periods. One gets to select the car and payment method that is best for their budget.
Tips on leasing of a car
For the consumer or buyer, the leasing figure is calculated by subtracting the cost of the car after the lease from the original price of the car before the lease. For a car that loses value quickly the lease payment will then be more as compared to a car that has a slow depreciation rate.
Private leasing of cars requires the drivers to drive within a certain mileage, mostly around 10000-15000 miles annually. To reduce any penalty costs arising from the leased car ensure that you understand the mileage restriction and try to ask for a better deal if it is too low. Furthermore, understand the penalty charges that come from refusal to conform to the mileage boundary.
If you are a person that most likely changes the car model every two to three years, then private leasing would be an ideal option for you. Those people who like having a car for more than four years can check with the private leasing companies to determine whether they can lease for a longer duration.