Having regular use of a car is essential to most people’s lives, whether it’s for personal or business use. There are many ways to own or hire a vehicle nowadays, so how do you choose which one is right for you? You have to consider all your options to see which one suits your needs and your budget best.

New cars – Buying a new car is very expensive. You either have to pay a deposit and pay the balance over a number of months or you buy it outright. With contract hire you have a much lower initial outlay and low, fixed monthly costs, which means that you don’t feel the pinch.

Used cars – These are obviously not as expensive as new cars, but they can still be costly, especially if they are nearly new. They are not without their problems, either, as depending on where you bought it from and its age, you may end up paying more on maintenance than you expected. With a contract hire car, however, you can always be sure that you are getting a reliable vehicle and you can include a servicing and maintenance package in the monthly rental.

Contract purchase – This funding method offers the facility to purchase vehicles over a predetermined period of time and at fixed monthly costs, without taking the depreciation risks normally associated with ownership. At the end of the contract, ownership can be retained by making a final balloon payment. Alternatively the vehicle can be returned for resale by the funder, with no further payments due. This is a good option if you want to ultimately own a car, but it for those who want long-term hassle-free motoring, contract hire is more advisable.

Finance lease - Finance lease is a tax efficient option where you choose to pay either the entire cost of the vehicle, including interest charges, over an agreed lease period, or opt to pay lower monthly rentals with a final payment based on the anticipated resale value of the vehicle. For a business requiring the combination of a minimal outlay with maximum tax efficiency, finance leasing provides an alternative to contract hire.

Hire purchase - The vehicle becomes the property of the lessee at the end of the period. The monthly payment is determined by the amount of deposit paid, the period of the contract and the sale price of the vehicle. If you want the freedom of long-term hire, then contract hire is probably a better option.

Personal contract hire – This is essentially the same as contract hire, but for private individuals.

Personal contract purchase – This gives you the option to purchase or return at the end of the agreement and you have the ability to change your car for a brand new vehicle on a regular basis.

UKVF is a privately owned vehicle finance and vehicle sourcing company and we have over 15 years’ experience in the industry. Whatever finance package you want, we can help. Give us a call today on 01257 267 036.