Which Car Leasing Option to Choose?

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Which Car Leasing Option to Choose?

There are many car leasing options you can come across and it is sometimes difficult to choose the
right one. You must do enough research to find out which car leasing option suits your kind of work,
business or personal circumstances.
Take a Look at - Lease cars
Contract Hire
Contract hire, contract purchase, leaseback and finance lease are the main types of car leasing options
available. Contract hire is a kind of long term rental arrangement which can be opted for by business
people and personal users. This kind of car leasing is suited best for those who prefer to pay small
payments initially every month, there is no risk of depreciation or the problem of disposing of the car,
for the user.
It is the finance company which provides the contract hire service, it buys the car, takes on the risk of
any possible depreciation or loss and takes the responsibility of disposing of the vehicle at the end of
the term of the contract. The contract is between 2 and 5 years, and the customer has to take a credit
check. So you must be reasonably confident that your credit file is up to scratch. Every customer can
have a tailor made contract to suit his individual needs and VAT registered business can claim half the
VAT charges. Vehicles for pure business use can claim all the VAT charges. Monthly rentals can also be
offset with profits which are taxable.
Have a Look at - Transfer lease
Contract Purchase
Contract purchase is a form of car leasing opted for by businesses or organizations. They hire
expensive cars and wish to be given the choice of either handing over the car at the end of the term of
the contract, or to buy the car at the end of the period. This kind of contract does away with the risk of
any depreciation. Here, an initial payment is made and is followed up by monthly installments. In this
form of car leasing, the car is shown as an asset in the account books of the business. At the end of the
term of contract, the business can buy the car with a balloon amount and claim ownership of the car, or
it can return the car and go in for a new contract for another car.
See To - Lease Car Hire Cape Town
Leaseback
Leaseback is a form of car leasing and is used by businesses. Companies which wish to free the capital
generated from the sale of the vehicle at market value to a finance company, generally go in for this
kind of contract. The finance company then leases back the same vehicle to the company which sells it,
and this is done with VAT in mind. This time round, the contract option is the contract hire kind.