Leasing a new car can make much more sense than buying one for many people. Here we take a brief look at the advantages of leasing your new car.
Types of Lease
There are two main types of leasing agreement: standard leases and PCP agreements.
Standard leasing agreements, also known as personal contract hires (PCH), are basically long-term car hire agreements. You agree to lease a vehicle for a fixed amount of time and when that time is up, the car is handed back to the leasing company. Such leases allow you to budget exactly because you know precisely how much your car is going to cost you each month. Any maintenance or major work required is usually covered under the agreement.
Leases can be cancelled at any time but there will be a fee for doing so. If your circumstances change and you need a different car you can also adjust your lease agreement to accommodate your needs. Sometimes, the lease company will offer you the chance to buy the car but only at the market rate, not a discounted one.
PCP (personal contract purchase) agreements are similar to PCH but the monthly fees are reduced and at the end of the fixed term of the contract (usually three years), the customer is offered the chance to buy the vehicle by paying one final ‘balloon payment’. You can either accept this and purchase the car or hand it back.
For more technical information on car leasing please see carleasingmadesimple.com/fsa.
Advantages of Leasing
As we have seen, because the maintenance of the vehicle is already covered, your car costs are fixed and predictable. There are no nasty surprises around the corner. If the car does need work, a replacement vehicle will be provided.
Leasing also allows you to drive expensive cars that you wouldn’t otherwise be able to afford. For example, certain Mercedes models can be leased for around just £300 per month. Less aspirational cars can be leased for as little as £100 per month.
Leasing also means that you get a new car every three years or so and you’ll never need to find a huge lump sum.
PCP gives you the option of buying the car at the end of the lease agreement for a reduced fee. You may want to take this option if you particularly like your car or if you are now better off than you were when you took out the lease. Alternatively you can return the car or exchange it for a new one.
Leasing means that you never have the hassle of buying or selling a car and it is a very flexible and easy way to take care of your automotive needs.
Car leasing companies are overseen by the BVRLA, see bvrla.co.uk for more details.
General Advice
Try to use a large, reputable leasing firm that has been recommended to you. For example, if you’re looking for fleet management or car leasing in Leicester, try the top leasing company in the area, totalmotion.co.uk.
Although it can be tempting to spend that extra £50 to £100 per month and get yourself a much better car, do try to stick to a sensible budget that you can afford.