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Contract Hire and Leasing Guide

Initial payments. Points to consider

The allure of advertised car and van leasing deals, with their low monthly payments juxtaposed against substantial initial payments, certainly grabs attention. However, it's crucial to delve deeper into these seemingly attractive offers to understand their true nature and implications. Typically, these deals require a large upfront payment, often equal to 12 months of payments, effectively elongating a 3-year lease to the financial equivalent of a 4-year commitment. This setup might initially seem beneficial, but it’s worth considering alternatives, such as a more manageable 1-month advance followed by 47 payments. Such an arrangement could offer a more balanced cash flow over the lease term.

Moreover, these leasing deals frequently come with restrictive low mileage limits, aiming to present the lowest possible leasing cost. This aspect is particularly critical to evaluate, as it directly impacts the lease's value based on individual driving needs. The emphasis on initial payments also raises an important point about liquidity. In an era where cash can be strategically deployed in various avenues to earn interest, tying up significant funds in a depreciating asset like a car or van may not be the most financially savvy move. This consideration is pivotal, especially when weighing the benefits of leasing, which inherently includes not immobilizing valuable cash resources in depreciating assets.

All Vehicle Contracts (AVC) champions a transparent approach to car and van leasing, endeavouring to ensure customers fully appreciate the benefits leasing offers without falling into the trap of misleading initial payment structures. By prioritizing transparency, AVC seeks to educate and guide consumers through the leasing process, making them aware of how to leverage leasing to their advantage while avoiding common pitfalls. This approach not only aids in making informed decisions but also underscores the importance of understanding the full scope of leasing agreements, ensuring that customers can enjoy the advantages of leasing without compromising their financial strategy.


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