How To Appreciate Contract Hire
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Measures such as the VAT increase to 20% as of next year will be especially damaging to the motor trade.Cars are thought to be the second most expensive purchase (after house buying) that a typical consumer makes. A car priced at £12,000 for example currently attracts £2,100 VAT. Another £300 will be added to that in January 2011. Factor in a rise in Insurance Premium Tax (IPT) to 6% in January which will increase the cost of warranties and motor insurance and bundle with increases in fuel costs and it’s no wonder that many motorists and fleet owners are reviewing the best way to keep on the road!
While it might not suit every driver, car leasing may be the answer to keeping motoring costs down.At the end of the day, no matter how luxurious or up-market the badge , any car will depreciate.The best advice in these circumstances comes from billionaire Paul Getty who said: “If it appreciates, buy it. If it depreciates, lease it.” There are no huge up-front costs, capital outlay or commitment to loans required at the outset with contract hire.Most contract hire providers ask for a down payment equivalent to three of the monthly instalments, which is usually much less than the typical deposit needed to buy a car.
Those monthly payments on something like BMW contract hire are also typically lower than repayments on a car loan because you are not paying for the entire cost of the car, you are just paying for the use of it over the term (usually 36 months) of the contract hire agreement.Above all though, contrcat hire means that you can drive your dream! Audi contract hire is high on the list of preferences for drivers who lust after beasts like the Audi A8 or Audi Q5 that would be beyond their budget if they attempted to purchase outright. Indeed, given residual values, it makes sense to go for the more prestigious makes for contract hire.
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