There are lots of ways to finance a new car and most people to opt to buy, but have you looked at car leasing?
So what is car leasing?
Car leasing involves a financial contract between yourself and a funder, the funder effectively purchases the vehicle on your behalf and rents you the car over a period of between 24 and 48 months.
The price is generally generated depending on the purchase price of the vehicle and the residual value after the term, the bit in between is the amount the funder needs to cover. The beauty of this is that you never have to worry what your car will be worth at the end.
You will never own the Car during the lease period, it will be owned by the funder. At the end of the term you simply hand the car back, it is not always possible to purchase the vehicle at the end of the lease unless you do it through a third party, such as Cocoon Vehicles.
To get a car lease, you need to be over 18 years old, hold a UK driving license and you will need to pass an external credit check, which is carried out by the funder.
Should you not meet the criteria of the credit assessment, then Cocoon Vehicles does offer a Non-status leasing option, based on its short term car leasing products.
- New Car every 2-4 years without the hassle of depreciation
- Lower upfront costs and monthly payments
- Fixed monthly payments that would only rise/drop should the VAT rate change
- Return the car at the of the period and start again
- You never own the vehicle, it remains the property of the funder
- Return conditions can be strict, see BVRLA Fair, Wear & Tear Guide
- Difficult to early terminate contract without penalities
- Mileage Allowance is strict, if you go over you will get charged
There are quite a few different options when financing your car, not just car leasing. Here at Cocoon, we can offer all options and with 12 different funders behind us, as well as manufacturer backed deals, we really can help you with your next car.
With Hire Purchase, you are purchasing the car from day 1, with the logbook in your name.
You pay an initial amount of money as your deposit, followed by monthly payments up to 60 months. At the end of the agreement, the car is yours. You can them keep the vehicle, sell it or trade it in.
You have no worries about the mileage on the car or what state the car is in, so no additional charges. Unlike, Personal Contract Purchase and Personal Contract Hire.
You do have the risk of the residual value of the vehicle and depreciation. Its not uncommon to have negative equity at some point of the agreement, depending on the vehicle purchased.
PCP as its known, is one of the most popular ways to finance a new car, giving you the option at the end of the vehicle to pay the final payment, hand the car back to the funder with no further payments or part exchange the car for another new one.
Similar to Car Leasing, you are financing the amount of money the car would potentially lose over the agreed time. This is based on estimating your mileage at the beginning and then the funder predicts the cars value at the end.
Personal Contract Purchase is an extremely affordable way of purchasing a car and we have no less than 12 funders who can help you with your next car.
Short Term Car Leasing is explained in more detail on one of our earlier blogs - Short Term Car Leasing
Its a fantastic programme that offers you the opportunity to take a vehicle for a fixed or flexible period of time, with low initial outlay and a shorter period of time.
The flexible programme allows you to run a vehicle from 28 days and hand it back without any termination costs (except if the vehicle is over mileage or has damage). Most cars are brand new and can include maintenance for one all inclusive monthly payment.
The fixed contract is just like a traditional car lease, giving you 5, 6, 7, 8, 9 or 12 month terms to take a vehicle over. This enables you to change your car on a more regular basis, forever, keeping that new car smell.
The cars on these short term car leasing programmes must be insured by the hirer and the return conditions can be a little stricter.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer. All offers maybe withdrawn at anytime and without notice. E and O E
T: 0800 802 1940
F: 01332 292306
Cocoon Vehicles Ltd
The Old Co-Operative
36 Holbrook Road
Cocoon Vehicles Ltd are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 711074
Registered in England & Wales with company number : 06113683 | Data Protection No : Z1350323 | VAT No : GB 907 7553 04
Registered Office : The Old Co-Operative, 36 Holbrook Road, Belper, Derbyshire, England, DE56 1PA
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