Most people automatically turn to ownership when thinking about getting a new car. It makes sense, our economy has been built on private property and ownership for hundreds out of years. However, there is another option: personal car leasing. Rather than paying up-front full price for a new car (or much less for a second hand car that may or may not be in good condition), you end up with a fixed monthly payment instead.

It may seem counterintuitive to fix yourself into a monthly contract in terms of your personal finance, but by entering into a personal car leasing contract you are instead giving yourself much more security in terms of your monthly budgeting, as, given the right car leasing contract, you can include extras (that aren’t extras at all) such as maintenance, road tax and the like. This means that there will be no surprises that could put a spanner in the works of your financial situation.

Similarly, taking out a contract hire contract means that you dont have to suffer the pain of a huge capital outlay in one go, or get into debt by taking out a loan in order to afford purchasing the vehicle. Instead, you can either pay for the usage of the car against the depreciation risk (Personal Contract Purchase) or you pay against the depreciation risk and towards the overall value of the car (Hire Purchase). Either way, you can end up facing much smaller monthly payments than if you took out a loan to buy a car outright.

Another advantage to personal car leasing over borrowing for purchase is that, should you become unable to keep up with the monthly payments of your car leasing contract, you can normally transfer the contract to another party. The car leasing company isnt too interested in who pays the bill, as long as someone does.

The final cherry on the cake, for those who do want to end up owning a vehicle, is that under the right car leasing contract, you can end up owning the vehicle. In a Personal Contract Purchase, a final balloon payment is needed to own the vehicle at the end of the contract term, giving you time to save up during the contract while still having the use of the vehicle by making low monthly payments against depreciation, although you are under no obligation to purchase the car. Under a Hire Purchase, the monthly payments include payments against a fixed value set at the beginning of the contract so that by the end of the term you are the owner of the vehicle.

For all these reasons and more, personal car leasing can be a great option for your personal finance when you next need to get a car.

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