Don’t dream it drive it!

Personal Car leasing has become incredibly popular in the last few years, with car owners and companies choosing to drive a new car every few years, but paying only half the price. It is basically a method of paying for a car over a specified period of time, which, although sounds like renting, is actually different. Whereas you can rent a car for as little as a day, leasing usually starts at about 24 months.

With personal car leasing the individual doesn't own the vehicle but are choosing to lease the car for a fixed period of time, at a fixed cost and a pre-determined mileage. A personal lease is known under the two terms, Personal Contract Purchase (PCP) and Personal Contract Hire (PCH). A PCP is a more flexible form of leasing whereby you can return the car at the end of the contract, extend it or buy the car. A PCH is simpler because once the contract is over you just hand back the car and walk away.

At the beginning of a lease you will probably have to pay a refundable deposit as well as the first month's payment. The price agreed for the lease of the car is then used to work out the cost of these payments, and is called the capitalised cost. When first agreeing to this cost it is advised that you negotiate as the dealer who is selling the lease may be trying to make more profit. The lower the cost you negotiate, the lower your monthly payments will be.

During the lease you will be expected to pay a monthly repayment, insurance and any taxes. The vehicle must be kept in decent condition and returned with no more than normal wear and tear. If you choose a PCH contract then you will have the choice to purchase the car at the end of the lease. If not then you can simply walk away.

There are many advantages to leasing a car, such as:

• Fixed monthly rentals which allow easy budgeting
• No risks associated with ownership
• Inclusive maintenance packages are usually included in the monthly rental to avoid any unwanted bills

Cars that would usually be too expensive to buy become much more affordable through a PCH or PCP plan.

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