“If it appreciates, buy it. If it depreciates, lease it.” – John Paul Getty
I’ve recently been working on a website for a car leasing company and thought I’d share a few words of newly acquired wisdom on the topic. The terms “car leasing” and “contract hire” are interchangeable, since when you lease a vehicle, you are simply hiring or renting it for an agreed contract period.
If you purchase a new car or van, you (usually) pay the full retail price for a vehicle that will begin depreciating before you even turn the key for the first time. As soon as you sign the documentation to become the first owner, your new motor starts reducing in value. To get the best value for your considerable initial outlay, you must run the vehicle for a good proportion of its lifespan, and that inevitably means driving around in an older car with increasing maintenance cost and declining appeal.
If on the other hand you lease a car or van, you only pay for the part of its life that you use. Often, the contract hire company can obtain better rates on the retail price of the vehicle, which makes this even more cost effective. For example, if a car costs £18,000 today and will be worth £9,000 in three years’ time, you are only funding the difference of £9,000, and that makes leasing cheaper than conventional finance agreements.
At the end of the agreement, you hand the car back with no worries about trade-in values.
If you’re a business managing fleets of cars or vans, business leasing and contract hire make perfect sense. Depreciation and maintenance costs can be eliminated, whilst the newer fleet presents a better company image and makes for a happy workforce.
Corporate fleet managers and personal leasing clients benefit from our influence with the UK’s largest finance houses. We have instant access to 12 different finance company quotation systems, which allows FVL to offer the most competitive car and van finance rates in the market meaning our customers get more motoring for their money.
I think the term you’re looking for is “no brainer”.
Agree with the no brainer comment, I own a removals company and to cut costs I sold my vehicles and started leasing and it has been brilliant.