If you are in the market for a new car, and are not sure whether to look for hire purchase or then reading this article will help. Many people make the mistake of think that they are very similar, but actually they differ in many ways – including payment duration, maintenance and repair of the car, and the extent of the finance.
So, let’s take a closer look at the differences between hire purchase and lease hire:
In simple terms, are cars that are bought through a financial contract between the customer (you) and the car supplier (us). This contract usually entails the customer paying the supplier a fixed amount of money per month for a specified period of time.
Hire purchase, on the other hand, is where the customer agrees to pay the total cost of the car in instalments over a period of time. These instalment's not only cover the principal cost but also the interest as well. The customer receives the car as soon as the hire purchase is signed, but doesn’t officially become the owner until after the last payment is made. The hirer can also terminate the agreement at any time, by taking ownership of the asset.
The main differences between lease hire and hire purchase:
Ownership. When you lease a car, the car is still owned by the leaser, and you the customer will not usually have the option to purchase the car at the end of the lease. With hire purchase, however, the customer has the option to purchase the car and so will become the owner of the car after the last payment has been made.
Duration. Hire purchase payments tend to be larger than lease payments as they are spread over a shorter period of time
Maintenance and Repair. With both lease hire and hire purchase repair and maintenance is the responsibility of the customer
Hopefully, this has cleared up the differences between hire purchase and lease hire when it comes to cars.
If you are looking for the best in the UK, then look no further than Amber Vehicle Solutions.