Buying a brand new car can be a satisfying experience. Not only do you get the ability to choose your exact make, model, colour and specification you don't have to worry about dodgy paperwork, unscrupulous previous owners or the fear that the car you have your eye on has had a less than immaculate history. Plus, of course, there is the benefit of that new car smell and the security of a manufacturer warranty.
Even so, buying a new car isn't without its downsides. After a house purchase, buying a new car is likely to be the most significant purchase you are likely to make. Plus, not only will there also be the fears about depreciation and resale value, there are also the inevitabilities that come with age-related deterioration after the car is outside of its warranty. And the hassle that comes with selling a car or the further financial hit you can take trading it against a newer vehicle.
This is where car leasing can step in to broaden your options, and make far less impact on your wallet. A car lease is a long-term rental agreement: you get the sole use of a car for a set period of time while make fixed monthly payments. After an initial rental deposit, lease periods can run for anything from two to four years, after which the car is returned to the dealer.
The advantages of car leasing
- You get to drive away in a car that might otherwise be out of your price range, particularly if you were to buy outright in cash. Leasing Options has a huge variety of vehicles to choose from, from humble shopping hatchbacks like the Ford Fiesta to glamorous convertibles like the Mercedes SLK. Figures suggest that more luxury cars are leased than bought outright.
- No large up-front costs. One of the biggest benefits of leasing is avoiding having to put down many thousands of pounds as a deposit to keep repayments manageable. In fact, monthly repayments on a lease can be around 35% less costly than a car loan and the initial rental cost can be a fraction of what would we be required to put down as a finance deposit.
- Fixed price motoring. Not only are the repayment costs fixed for the duration of the lease, road tax and a warranty is included in the price.
- No need to worry about depreciation. The moment you drive a new car away from the showroom, you have affected the resale value. At the end of a car lease, you can simply choose a brand new vehicle and have the old one taken away. The more a car is likely to depreciate, the greater the incentive to lease rather than buy.
- If taking a 'business use' lease, the self-employed and business owners will be able to claim back the leasing cost as an expense.
What to bear in mindThere are several factors to take into consideration before deciding to lease a car, to ensure that you get the best value for your money.
- You will not own the car after the end of the lease. Although you will not have to shoulder the costs of the vehicle's depreciation, you will not be gaining any equity in the car with monthly payments.
- Monitor your mileage: a leasing contract will stipulate your mileage allowance for each year and going over your annual mileage estimate will lead to additional charges.
- Make sure you are insured. Although leasing includes a warranty and road tax, fully comprehensive cover is required and any accident repairs will need to be arranged by the person leasing. Similarly, any damage beyond 'reasonable wear' can result in extra charges.
- Do your sums. Choosing the right car, with the right circumstances could save you a considerable amount of money over the course of three years.
Armed with this knowledge, take a look at some of the cars that Leasing Options has available, as well as some of the special deals, starting from as little as £79.99 (+VAT) per month. For more information, you can take a look at our 'why should I lease and not buy?' section (http://www.leasingoptions.co.uk/carleasing.aspx) and our FAQ guide (http://www.leasingoptions.co.uk/faq.aspx).
