Is Contract Hire Worth It

Contract hire is a form of car leasing that has become increasingly popular in recent years, as it offers a way for people to drive a new car for a set period, without the need to worry about depreciation or selling the car at the end of the term. However, it is important to consider whether or not contract hire is worth it before making a decision.

The benefits of contract hire are clear. Firstly, it provides a fixed monthly payment, which can make it easier to budget for motoring expenses. This payment covers the cost of the car, along with maintenance, servicing, and breakdown cover. This means that there are no unexpected expenses, making it easier to manage finances.

In addition, contract hire allows drivers to have a new car every few years, without the hassle of selling the old one. This means that drivers can enjoy the latest technology, safety features, and fuel efficiency, without having to worry about the cost of buying a new car.

However, there are also some downsides to consider. Firstly, while the monthly payment may be lower than buying a car outright, there are still some upfront costs to consider, such as a deposit and an administration fee. This can be a significant amount of money, and it is important to make sure that the monthly payments are affordable before committing to a contract hire agreement.

Furthermore, contract hire agreements come with mileage restrictions, which can be a problem for those who drive long distances or need to use their car for business purposes. If drivers exceed the agreed mileage, they will incur additional charges, which can be expensive.

Finally, at the end of the contract hire term, drivers do not have the option to buy the car. This means that they have no asset to sell or trade in, and they will need to start the process of finding a new car again.

Overall, contract hire can be a good option for those who want to drive a new car every few years without the hassle of selling the old one. However, it is important to consider the upfront costs, mileage restrictions, and lack of ownership at the end of the agreement before making a decision. As with any financial decision, careful consideration and research is key to determining whether or not contract hire is worth it for your individual circumstances.