Both require the customer to pay a deposit followed by set monthly payments.
Many people benefit from this arrangement, because the upfront deposit is typically only around three months-worth of payments, and the subsequent lease rate means that they can fix the costs of having the car over a set period of time.
Other benefits include a lower rate of interest than a car loan, the option of having a car that might have a purchase price out of your range and running the car for the extent of its warranty term, giving peace of mind on any mechanical issues.
In addition, the arrangements can be supplemented by a maintenance contract, which covers all repair bills in exchange for a set monthly fee.
Lease prices vary from company to company, but are typically worked out based on initial purchase price, age, mileage, condition and residual value of the car.
Read on for our definitive guide to contract hire and leasing for companies and private individuals, and find out which deal is the right one for you.
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