subject: Methods Used For Private Leasing Of Cars [print this page] Private leasing of cars involves three methods that a customer can choose to use when hiring a car. Leasing can take place using the Personal Contract Hire method (PCH), the Business Contract Hire method, or the Personal Contract Purchase method (PCP) to function.
Private Car Contract Hire method is the most used procedure by car dealers when leasing their cars. The car dealers achieve this through the charging of monthly installments payments made by the customer. The person leasing the car continues to make the monthly payment until the last period is reached. This method of payment is always done before starting to drive the leased car. The advantage of this method is that it is extremely cheap to hire the car in comparison to the traditional methods used to hire cars long ago. There are drawbacks that come with this method of leasing. For instance, the individual or the company that is responsible for the car-leasing project always set restrictions on the distance to cover. Thus, if the lessee tries to drive beyond the set distance, then he/she will be penalized for that. The company uses this trait to calculate the vehicles worth and value. The main advantage of this technique is that the user is capable of driving a car of his/her choice. For instance, the user can lease a car, which, is instead very costly to purchase.
Private leasing of cars works by using the second method, which is the Personal Contract Purchase method (PCP). This technique functions similarly to the Personal Contract Hire method. It provides the customer a chance to purchase the leased car. The company first calculates and decides the initial amount of payment the client ought to disburse before purchasing the car. Additionally, the company calculates the worth of the car when the leasing period expires. At the end of the leasing period, the leaser has a right to choose whether to buy the car or not. The chief drawback that comes with this method is that the payment especially the initial installment is extremely high. The user has an advantage of choosing the type of car that he/she wants to drive without fear of damaging the car.
The Business Contract Hire method involves hiring of vehicle or a fleet of cars to clients and big companies. It allows the client to suggest the price of leasing and to control the maintenance contract. This guarantees a continuous flow of cars to other businesses. This method is applicable to businesses that aim at attracting new and more workforces into their company. They do this to impress the new employees. The advantage of business lease is that it guarantees the business with a continuous flow of money. This is achieved through the retaining of the capital instead of permanent monthly lease let fees.
All the above three methods are good to use in private cheap leasing of cars or as the Danish say billig bil leasing. This is because there is no risk of residual value loss and you are offered a choice to change the leased car frequently. Therefore, for one to choose the right method to use, it greatly depends on the lessees choice and preferences!
