Do you love driving new cars but hate shouldering the cost of depreciation? If so, leasing could be the perfect fit for you. Leasing is a popular and practical way to drive a new vehicle without all the expense of owning it. Modern vehicles are safer, more fuel efficient, and more comfortable and enjoyable to drive and travel in, but only a small percentage of people can afford to buy a new vehicle outright; for most, the prospect of purchasing a new car outright remains a distant dream. That’s were leasing steps in, making the luxury of driving a new vehicle an attainable reality for many. In this article, we’ll learn more about how leasing works, the benefits of leasing a car, and offer insights into what to consider before signing on the dotted line.
What is car leasing?
Leasing is essentially a way of renting a brand-new car for a set period in exchange for one upfront payment and an agreed monthly cost. A wide variety of cars are available to lease, from flashy sports cars to large, practical, family SUVs. Lease deals come in as many different shapes and sizes as the cars – it is possible to pick up a lease deal that caters to virtually any budget or requirement. At the end of the lease deal, you can either exchange the car for a new one or simply hand the car back. Compared to traditional financing options or bank loans, leasing is usually a more cost-effective way to enjoy a new car.
Who can lease a car?
To qualify to lease a car in the UK, most leasing companies require individuals to meet these fundamental requirements:
∙You must be at least 18 years old.
∙Possess a full, valid driving licence.
∙Pass a credit check.
When you enter into a lease, you enter a binding financial agreement, so you must be capable of handling the monthly repayments on time and in full. To assess your suitability, you must complete and pass a credit check before qualifying to lease a car. A credit check provides the leasing company with some insight into your employment status and history and your finance history over the last six years, providing them with security and assurance that you are a good candidate for leasing and can comfortably make the repayments. If you have a poor credit score, it is at the discretion of the finance company whether or not they choose to lease to you. Some leasing companies may still accept you if you agree to make a higher initial payment and higher monthly payments or if you can provide a guarantor. In addition to passing a credit check, most leasing companies will also need you to provide proof of address and income before granting you a lease. Those with major driving offences may also find getting accepted for a lease deal more difficult.
What are the benefits of car leasing?
There are many advantages of leasing a car over buying one, making it an attractive option for many drivers. Here are some of the key benefits of leasing a car: Experience the luxury of driving a brand-new car – Leasing allows you to drive a brand-new car equipped with the latest technology and safety features, giving you a comfortable, reliable, and enjoyable driving experience. Enjoy the mod cons – Brand new modern vehicles often come equipped with cutting-edge technology that makes travelling a more comfortable, enjoyable and safe experience. State-of-the-art infotainment systems, keyless entry, and advanced driver-assist technologies often come as standard in new lease vehicles. Pay one affordable, fixed monthly cost – At the start of the lease, you are usually required to pay a one-off cost, after which you pay just one predictable fixed monthly cost, making it easier to budget and manage your finances.
Avoid the cost of depreciation – According to the AA, if you drive 10,000 miles a year on average, the average car loses around 60% of its value by the end of its third year. When you choose to lease instead of buy, you can enjoy the benefits of driving a brand-new car, without worrying about the depreciation cost. You never own the car, so the leasing company will bear the cost of depreciation, not you.
Change cars regularly – If you’re the kind of person who gets bored of your car quickly, then leasing is the ideal option for you! Lease deals typically last for a few years, giving you the flexibility to switch to a new car and ensuring you always have access to the latest models.
Affordable down payment – The initial down payment for a leased vehicle is often considerably less than the deposit required for purchase finance, making it more accessible to a broader range of people.
Minimal maintenance costs – Because you are leasing a brand-new car, maintenance and servicing costs are usually minimal. You may also wish to add a maintenance and servicing package to your lease agreement for convenience and peace of mind.
Important things to remember when leasing a car.
As we’ve just heard, leasing a car has many advantages, but it’s also important to remember that when you lease a car, you enter a binding financial agreement. You should always ensure you fully understand the terms of the agreement before signing on the dotted line; as with any binding agreement, breaking the terms of your lease could result in significant penalties and even legal action.
Here are a few points to consider when deciding whether leasing a car is the right option for you.
You will never own the car – One of the most significant things to remember is that you will never actually own a car if you lease it. At the end of the lease deal, you must exchange it for a new one or hand it back. You don’t get anything back at the end of the agreement.
Damage penalties – Whilst most warranties cover mechanical elements, so you don’t need to worry about these, if you cause any damage to the car, like cosmetic bumps and scratches, you will need to pay to have these repaired before you hand the car back or you will be charged for the damage.
Mileage restrictions – Most lease agreements come with a mileage cap, limiting the number of miles you can drive during the lease term. Exceeding this limit will result in additional charges, so it’s important that you accurately estimate your annual mileage before entering into the contract.
Early termination fees – If, for some reason, you can no longer afford the monthly repayments or no longer want the car, early termination will result in financial penalties and could impact your credit score. Always read the terms of your lease agreement carefully, make sure you’re prepared to commit to the entire lease term and understand the consequences of early termination.
Want to find out more about leasing a new car?
LetsTalk Leasing is an independent online leasing company offering customers the very best prices on new vehicle leases. When you lease a car with us, we will make the process as simple as possible by being transparent with our fees and providing a straightforward service.
Discover the special car leasing offers we currently have available, or for more information about our services, contact our team of friendly advisors by calling us on 0330 056 3331 or emailing firstname.lastname@example.org.