How to buy a car without spending your savings?
There was a time when cars were sold by customers purchasing them outright. You would see them marketed at their full price. This meant that people had to save for years until they had enough money to purchase a car. Some people would never reach that and have to rely on public transport.
However, the world has changed. Now, you no longer see cars marketed at full price. You see them marketed on monthly payments and that is the key to you being able to afford a car without saving up for years and then spending all those savings. You can get a car through car leasing.
What is car leasing?
Car leasing is rising to be the method of choice when it comes to acquiring a car. It is in basic terms a long-term rental of a car for personal or business use. The car can either be returned to the lender when the lease comes to an end or it can be bought through a balloon payment when the lease concludes.
Car leasing agreements work by you choosing to pay a deposit, followed by a series of monthly payments for an agreed period of time.
Do you need to pay a deposit?
So, whilst you no longer have to spend all your savings on the car outright, you could spend a little on a deposit. This would pay off a chunk of the agreement value at the beginning. You can pay it in three forms.
- Deposit worth three months of payments
- Deposit worth six months of payments
- Deposit worth nine months of payments
However, you don’t have to spend your savings on a deposit either. No deposit car leasing allows you to lease a car without paying any sort of deposit. It will mean you have to pay higher monthly payments than you do if you paid a deposit, but you aren’t losing a chunk of money from the very beginning.
By not choosing to pay a deposit, the amount you would have paid is spread evenly across the series of monthly payments that will make up the agreement.
How car leasing works
Car leasing works by you choosing the car you want, how long you wish to drive it for, how many miles you want to drive a year and whether you want to pay a deposit. These are all things you must consider.
The length of your agreement will have an effect on how much you will pay per month. Leasing agreements last between 24-48 months, with some extending to the maximum of 60 months. The shorter the period the more you have to pay off per month and vice versa. If you want the lowest payments per month, go for the longest lease option.
You must also decide on your mileage allowance annually. This gives you the chance to estimate how much you will drive a year. If you are getting a car for business rather than pleasure, you will be expected to drive more miles each year.
The more miles you give yourself in your allowance, the more you will be paying per month. Similar to how car insurance works, the more you drive the more you pay. This is because the value of the lease agreement is related to how much depreciation the car suffers from over the agreed period. The more miles you drive a year, the more the car depreciates, the more you pay per month.
Your credit score affects your lease
The most important factor that relates to keeping your leasing agreement value low is your credit score. The better the credit score, the lower your monthly payments.
If you have a fair to excellent credit score, this means you have had a successful relationship with credit – never missing a payment and successfully paying back credit debt in the agreed periods. This means lenders deem you trust worthy when it comes to paying off your lease.
However, if you have poor or bad credit, you will face higher payments per month. Some of you may be rejected due to the poor credit rating, but there is a chance to lease through bad credit car leasing.
Car leasing offers you plenty of chances to drive away with a car without you having to spend all your savings. Zero Deposit Car Leasing offers a wide range of cars through all types of leasing whether than be used car leasing, bad credit car leasing or no deposit car leasing. Take a browse and if you find the right car for you personally or for your business, get in touch.
