You can choose to purchase or lease car or other assets, but do you really understand what leasing is and why it works for you and the leasing company?
September 30, 2019
Vehicle leasing is a method of getting use of a vehicle you don’t actually own, cheaply, and for a period of time governed by the contract you have. It is cheaper than buying the same vehicle outright for the user, as you the user is not taking ownership of the vehicle for the full length of its working life, rather leasing it for a period of that life. That means the person / company that actually owns that vehicle could have a future life with it or resell the vehicle afterwards to realise further value from it.
The funding house owns the vehicle. The funding house is quite often a bank or major investment firm because running a fleet of vehicles requires a very large outlay of capital.
Contract hire allows funding houses to own very large numbers of vehicles so long as they has the investment capital. The benefits of volumes of scale allow the funding house to invest en-masse in vehicle servicing, maintenance servicing, tyres, management systems, resale processes, purchasing power, etc. In short if a company becomes professional and expert in buying a vehicle, runs it well and cheaply in-life and sells it better at the end than the individual... there is money to be made and everyone benefits.