Is leasing right for me?
There are many things to consider when deciding whether leasing is right for you.
Firstly, you must determine whether leasing is a possible option for you. Can you afford the initial payment and ongoing monthly payments? Can you confidently say that you do not foresee any circumstances that may affect this affordability? Is your credit score healthy enough to allow you to be accepted on finance? You must also be a UK resident, have a permanent, identifiable address and a driving licence (provisional is accepted by some funders).
If your answer to these questions is ‘yes’ then leasing your car is a possibility for you. If your answer is ‘no’ you are not likely to be accepted on finance and our advice would be to consider another method of funding your vehicle.
If leasing is a possibility based on the above, next up is to consider its financial viability for you personally. For many, buying outright seems to be the most financially viable choice when overall cost is the main consideration, providing they have the funds to do so. This is certainly the case with interest incurring products like PCP and Hire Purchase. But with a Contract Hire leasing agreement you could pay less for the car than you would when buying it and selling it over the same period and mileage. This is because you are only paying for the depreciation of the vehicle and that figure is set at the outset of your agreement. If you do not have the upfront funds to buy a car outright, leasing gives you the option to drive away a new car for a set monthly fee instead. When considering that that road tax is included at the prevailing rate, this could save you £100’s a year from your running costs compared to buying outright or with other financing options.
Leasing contracts will come with restrictions on mileage and vehicle condition. You will be expected to hand the car back at the end of the term having travelled equal or less than the mileage set in your agreement. Likewise, your leasing company will expect the car to be returned in a condition reflective of standard use for its age and mileage. Any excess miles or damage will be chargeable. This means that if you are not in a position to accurately predict your mileage use or your vehicle is likely to be subject to rough use or excessive damage, then leasing may not be the most cost effective option for you.
Carparison are affiliated to the BVRLA whose guidelines set the standard for what is deemed fair wear and tear on returning lease vehicles. You can request these guidelines at any time from your Leasing Consultant, or view the BVRLA's fair wear and tear guide online.
If you are fed up of unforeseen repair bills and the hassle of repairs, then the stability and convenience of leasing may be attractive to you. One benefit attributed to leasing is that it allows individuals the ability to be able to afford new and therefore more reliable cars. Leasing is deemed the most convenient form of vehicle procurement – the vehicle is delivered to you and collected at the end of the term, road tax is taken care of by the leasing company and faults are covered under warranty for the first few years at least. You do have to service the vehicle and complete an MOT if your lease is longer than three years in duration as you would with any other funding method. However, maintenance packages are available to reduce these costs into monthly payments that are bolted onto your lease payments (note: maintenance packages are not restricted to leases and are possible when you buy a car too).
This premise extends to more economical vehicles, too. Newer cars are required to adhere to stricter emissions standards than older ones. Therefore, leasing could open up the possibilities for you to move to a vehicle with a smaller carbon footprint. Ready to go fully electric? Then a lease can be a surprisingly affordable option due to the slower depreciation levels of electric cars.
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