When it comes to personal contract hire agreements, many people are only concerned with the monthly payments and the terms and conditions of the agreement. However, it is important to consider what happens to the vehicle at the end of the agreement, as this can greatly affect your overall cost and experience with the agreement.
At the end of a personal contract hire agreement, there are generally two options for the vehicle: you can either return the vehicle to the leasing company or purchase the vehicle from the leasing company. Let’s take a closer look at each option.
Returning the Vehicle
Returning the vehicle at the end of the personal contract hire agreement is the most common option for those who do not want to keep the vehicle. When returning the vehicle, you will need to make sure it is in good condition and meets the agreed-upon mileage restrictions. If the vehicle has excessive wear and tear or has gone over the agreed mileage, you may be charged additional fees.
It is important to carefully inspect the vehicle before returning it to the leasing company to make sure there are no damages that were not previously noted. You may also want to consider having the vehicle professionally cleaned to ensure it is in the best possible condition.
Purchasing the Vehicle
If you have grown attached to the vehicle and want to keep it, you may have the option to purchase it from the leasing company at the end of the agreement. The purchase price will typically be determined by the residual value of the vehicle, which is the estimated value of the vehicle at the end of the agreement.
If you choose to purchase the vehicle, you may need to obtain financing through a bank or other lender. Keep in mind that purchasing the vehicle can be more expensive than returning it, so it is important to carefully consider the costs and benefits of this option.
At the end of a personal contract hire agreement, it is important to carefully consider your options for the vehicle. Whether you choose to return the vehicle or purchase it, it is important to make sure it is in good condition and meets all agreed-upon terms and conditions. By understanding what happens at the end of the agreement, you can make an informed decision and avoid any unexpected costs or issues.