Car leasing seems to be quite a daunting term for those who lack knowledge – but when you actually think about it, it can make driving the car you want so much easier. On the other hand, it does have its fair share of cons.
What is leasing?
Car leasing is basically just the long term hire of a vehicle. You have an arrangement with the company who you lease the car from in which you pay fixed monthly payments in order to drive the car. The monthly payments are affordable for you and allows you to drive a newer car which isn’t usually as easy if you have to buy the car outright.
Within leasing, there are many different deals you can choose from in order for the contract to suit you.
- Personal Lease: This leasing option is a great way for you to lease the car you want which ticks all the boxes for you. This could be a cute little city car, a handy 4×4 or even a prestige car.
- Business Lease: This option is ideal for companies which need a car for commuting. You’re able to get a car which portrays the company well with no worry about depreciation.
- Personal Contract Purchase (PCP): This option allows you to pay cheap monthly payments with the choice of owning the car at the end of the contract. An all-inclusive maintenance package is available.
- Personal Contract Hire (PCH): PCH allows you to drive the car for a certain amount of time, paying fixed monthly payments in which you return your car at the end of the deal. Depreciation is not a problem with this option.
- Hire Purchase (HP): Similar to PCH, you have the car for a certain amount of time whilst paying monthly payments and then the car becomes yours at the end. A balloon payment is available for you to pay which aims to lower your monthly payments.
What are the advantages to leasing?
Predictable monthly costs
You know the exact amount which is coming out of your bank which aims to makes things more organised and easier for you.
With leasing, you’re able to deposit any amount you’d like or even zero deposit. The more you deposit, the cheaper your monthly payments will be.
Leasing allows you to drive in a newer car for a much more affordable price than buying.
This is not a worry unlike it is with when you’ve purchased a car. Because you’re not the owner of the car and you have to return it to the company, you have no worries when it comes to trying to sell it a few years later.
Leasing features a range of different deals including zero deposit deals, bad credit deals and all of the different paths which you can take. This is so you can find the best option to suit you and your finances.
Surely there are some disadvantages?
Some people prefer to actually own their car and with leasing, this isn’t always the case. Depending on the deal you choose, ownership sometimes isn’t the case.
This is not ideal for those who do a lot of travelling, as it costs your extra if you go over your set mileage. Sometimes the maximum mileage just isn’t enough.
Of course buying a car upfront can put a huge dent in your bank but leasing often works out to being more expensive in the long run.
Wear & tear
Driving in a car you don’t actually own can be such a hassle, especially if you spill a drink, tear the seat a little etc. The cost of wear and tear always adds up and can end up being quite a hefty payment.
So, what do you think? Is leasing for you? If not, you can always finance a car which could be more ideal for you. Cheap cars on finance are available in order for you to drive with a smile, in the car you want, for an affordable price.