Car Lease is a general although not specific phrase which means that a car or van is financed. The lease vehicle is not owned by the driver or the company using it but instead is owned by a finance company and is leased to the driver or company over an agreed period for an agreed monthly payment.
1st- Leasing specialise in cheap car leasing by matching the cheapest suppliers with the cheapest finance company and offering the best lease deals. So we might purchase the vehicle from Inverness and use a finance company in Cornwall so long as our customers get the best and cheapest lease deal possible.
There are many types of finance which all share the heading leasing however the lease will normally fall into one of the following categories. Contract Hire or Personal Contract Hire (PCH), Finance Lease, Contract Purchase or Personal Contract Purchase (PCP) and Hire Purchase (HP).
Contract Hire and Personal Contract Hire (PCH) are both long term hire agreements where there is no guaranteed future value (balloon), and at the end of the lease period the user generally has the option to renew or replace the lease vehicle, however normally also has the option to purchase the lease vehicle and the price calculated dependant on current market values. With Contract Hire additional facilities such as Full Maintenance can be bolted on.
Finance Lease is a method of financing a vehicle where the vehicle remains the property of the finance company, with the vehicle effectively hired out to a business. The business can then use this asset while paying an effective rental rather than a repayment. The leasor has full use of the vehicle during the finance lease period. At the end of the finance lease agreement the vehicle is sold to a third party by the finance company, if the sold price is above the predetermined balloon payment then the finance company will refund a percentage of the proceeds back to the hirer, if the sale price is below the balloon payment then the hirer will be liable to make a further payment to the finance company.
Contract Purchase and Personal Contract Purchase are broadly the same as Contract Hire and Personal Contract Hire with one key difference. At the start of the lease the finance company will set a guaranteed future value (GFV) otherwise known as a Balloon Payment, which if chosen will be the price to purchase the vehicle at the end of the lease period to take ownership of the vehicle. With Hire Purchase you are funding the total vehicle cost rather than the difference of the vehicle cost and the residual value.
Lease Purchase is very similar to a Contract Purchase arrangement however with no return policy. At the end of the lease period the leasor must pay the balloon payment and take owner ship of the vehicle. Lease Purchase is fairly uncommon these days.
The large majority of the leases we sell tend to be Contract Hire and Personal Contract Hire. This is because these finance methods tend to offer the cheapest monthly payment. For those opting out of the company car scheme both Personal Contract Hire and Personal Contract Purchase are most popular.
Short Term Leasing is leasing over a shorter than normal period. The short term lease that we offer is based on a 3 or 6 month rental or a 12 month lease agreement. So you can lease for any period 3,6, or 12 months.