Understanding different leasing styles

First we need to understand what it is. Car leasing is simply a contract between an individual or a business, a finance company and a dealer. Some time ago, the business route and the ‘company car’ was a standard component of executive salary packages but it’s become less common as the taxman moved against it by introducing company car and car fuel benefit charges which incur a personal tax liability. There are defined parameters such as mileage, term and monthly rental. However a significant proportion of cars bought today are still company cars, so the business route is still attractive to many.  An estimated 80% of Fortune-class companies lease vehicles. But not all leasing companies of Corporate Leasing in India are built the same, and the differences can make a difference to your bottom line.

Business Contract Hire is a credit agreement between any business and a finance company. The finance company owns the vehicle, and the lease is essentially paying for the depreciation in value of the vehicle during the contract duration. Therefore to get the best lease prices possible, businesses should look to take out a contract on cars which hold their value well over time. There are many benefits for a business investing in contract hire compared to finance purchasing. But rather than traditional hire purchase (HP), where you pay for the car in installments until you own it outright, most sales have been via personal contract purchase (PCP) deals. 

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