Car leasing options from non status contract hire
Car Leasing Options
Car finance in the UK has both benefits and drawbacks. One benefit is that subject to your credit score you could get money for a car quickly with a car finance loan. Saving up for a car instead, would usually take much longer. It might be worth considering car leasing instead however. We`ll tell you the benefits to both in this article.
A drawback to getting a car loan is that you`ll need to shop around to get a good deal. APRs on car loans can be high, but the market is competitive so as long as you do your homework you can still get a reasonable offer. Then again, a lot of lenders have recently tightened their lending criteria so you might not be eligible if you have a poor credit rating unless you go with a non-mainstream lender.
`Optional` Extras
When it comes to car loans it`s also worth taking in to account how many `optional` extras some lenders try to tack on to your loan in order to make more money. These range in type and style but a common practice is adding certain types of additional insurance such as GAP insurance.
You could be told by a company that additional insurance is essential but make sure that you read the small print before signing on the dotted line. Reports in the press have revealed that some car loan lenders are mis-selling insurance to top up loan amounts.
Sometimes a £7,000 car can end up costing a borrower as much £21,000 using these tactics, without the borrower realising how much extra they`ll have to pay over the length of the loan period. Get all the information you can and read through it thoroughly before accepting contracts.
Car Leasing Benefits
Car leasing options are very different to car finance loans; you don`t ever truly own the car with a car lease. However, you do pay considerably less in order to use one and you make payments for a set amount of time (the lease period) once the lease period ends you can renew your lease for another period or end it.
Car leasing is especially useful during the current recession because monthly payments are cheaper than a car loan, you can get access to a car quickly and depending on the terms of a car lease contract you might be able to pay off the contract for early termination if you need to. Car contract hire is similar, but because all lease and hire providers have different terms in their contract it`s important to review deals fully. Ensure you know how much any add-ons or opt-ins could add to your payments.
Car Insurance
There are a few different insurance options associated with car leasing and cars bought on car finance. These are usually just insurance add-ons. Often lenders and leasers will offer you insurance to cover any illness or accidents which prevent you from making payments, - effectively insuring your payments not the car itself.
Another type of insurance you could be offered is in case you lose the car or it`s damaged. In situations like these you may still have to pay off the remaining loan or lease amount, even if you no longer have the car. Insurance for this can protect you and pay off the remaining loan or lease.
Standard car insurance will still need to be paid along with any add-ons and other costs associated with running a car however, such as taxation and maintenance, whatever additional insurance options you choose.