Lease v Purchase:
When it comes to looking for a new car, many people aren’t given enough information on the benefits of leasing over purchasing a vehicle. Since leasing’s popularity has been on the rise over the last 10 years, it is a subject that generates a lot of discussion, but correct answers are few and far between. Leasing offers most makes and models in one place and makes it easier for you to find and drive away with the car of your dreams.
The first thing people should consider is “how much can I afford?” Many view leasing as their first option because of the potential lower monthly installments of leasing compared to instead of paying for a vehicle in an all-out lump sum. Leasing also means that you will not be paying for the depreciation in the vehicle compared to those who purchase the same make and model.
As is common knowledge the further the car is driven the lower its value becomes. When leasing, before you sign the agreement, the leasing provider lets you give your annual mileage estimation. This is so they can predict the mileage at the end of the contract and know how much the car residual value will be.
However, going over the given annual mileage could result in extra costs. This can sound scary or unappealing to some people as they think it will be hundreds or even thousands of pounds more, but in most cases, we are talking pennies rather than pounds more per mile. Give a realistic estimate of your mileage before the contract is agreed, and it should take away any surprise payments at the end of the lease period.
Initial Payment / Initial Rental:
Down payment, initial rental, initial payment – the terms may differ, but they all mean the same thing. You will be required to put down a payment, substantially more than the following monthly payments, however, the more that can be paid in this initial payment, the monthly lease cost will be.
Leasing providers do not expect the car to be in the same condition at the end of the agreement as it was at the beginning. Most vehicles will have minor dints or scratches as a result of general use. If the vehicle comes back in an unsatisfactory condition, then the lease holder will be expected to pay. All information and guidelines will be in the contract agreement before signing.
Benefits of Leasing:
- Drive away in a new vehicle with small upfront payments
- Lower costs mean you have your dream car at a price you can afford
- Payments, contract length and mileage are all catered to your needs
- Including a maintenance option in your agreement takes a lot of stress out of your day
Should I Lease or Purchase my next vehicle?
Do you feel that the points outlined above appeal to you? If you answered yes then leasing would appear to be the best option for you when it comes to looking for your next vehicle.
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