Are you wondering whether leasing a car is right for you? Perhaps you have never leased a car before and considering whether it makes more financial sense than purchasing a vehicle?
A few years ago car leasing was relatively unheard of in the UK, despite that it was hugely popular in the US where one in four cars are leased. However, in the last four years car leasing in the UK has become increasingly popular, as the ‘direct debit generation’ have become used to paying for things on a monthly basis such as utility bills, insurance and mobile phones.
With the buyer’s change cycle becoming shorter more people are considering leasing as a good way to get and stay in a new car for less.
What is car leasing?
If you choose to lease a car on a personal contract hire basis, you will make a series of monthly payments for the duration of your lease agreement (typically 24 to 48 months, for example). Unlike dealership finance or bank loans you are essentially only paying for the depreciation of the vehicle over the rental term rather than the full capital value. As opposed to paying a large deposit you can simply pay a small initial amount, usually equivalent to three monthly payments at the start of the lease.
Fleet UK has detailed the top 10 reasons why you should consider leasing next time.
1. You’ll get to drive a better car
The option to drive the latest car is not a luxury a lot of motorist can afford. But If you lease a car you’ll end up driving a vehicle which is newer and more technologically advanced than if you had bought one. Why? With a car lease you only pay the car’s depreciation for the lease period, not the value of the car. This results, typically, with your monthly payments being lower in comparison to other forms of finance.
Buying a car can typically result in driving it for a decade or more whereas leasing gives you the freedom to have the newest model every two to four years, complete with your choice of extras such as additional technology , driver aids. Plus you can pick your own paintwork.
If you get bored with your car easily, leasing often works out the easiest and most cost-effective way to change your vehicle often.
2. Drive a more reliable car
It goes without saying that the older a vehicle gets the less reliable it becomes and you’re faced with increasingly higher service, MOT and repair bills. No-one wants to get landed with huge repair bills to replace the likes of a timing belt or fix a broken clutch. Research from Holts Lloyd International showed UK drivers are spending £21 billion a year on preventing cars from failing. Breakdown costs can be expensive and UK drivers are spending on average £559 repairing issues with their cars each year.
By leasing a car that won’t be such a problem because you’ll be driving either a new or nearly new model. Also, if something does go wrong with your leased car it will normally be covered by the manufacturer’s warranty.
Plus, if you lease a car with maintenance, we will cover your car for routine servicing, repairs and tyres.
3. Receive an excellent deal
Car leasing companies such as Fleet UK operate as independent vehicle brokers and on a daily basis receive real-time deals from dealerships and major finance companies in the UK. This means you can be offered the most competitive market rates available and help drive down your monthly costs.
4. Enjoy the latest technology and safety features
Driving a new or a nearly new vehicle provides the benefit from the latest in-car technology which is constantly evolving. It’s predicted that cars will change more in the next 5 to 10 years than over the last 50 years. Some of the latest technology encompasses improving road safety, lowering emissions and taking some of the stress out of driving on our busy roads. For example, a recent popular in-tech addition includes Autonomous Emergency Braking which detects a potential crash ahead and prepares the car by audibly warning the driver or taking evasive action itself by applying the brakes. A multitude of different car manufacturers such as Audi, Tesla, BMW, Ford, Skoda and Nissan have adopted this technology.
Other advances of in-car technology you could benefit from by leasing a new car includes:-
Connected Mobile Apps
No-one travels anywhere without them and an increased number of drivers want them to be involved in their driving experience. Many car manufacturers have developed their own apps such as BMW’s ConnectedDrive app or the Mercedes Me app. Such apps can lock/unlock your car, set climate controls (I can heat start demisting my car from the comfort of my warm house) and have the car make a noise if you’re struggling to find it in a multi-storey car park!
Most modern cars offer a high level of protection to their occupants in an case of an accident and have technology to potentially prevent accidents from happening in the first place. As well as older mandatory systems such as anti-lock brakes, electronic stability programmes and ISOFIX child-seat mounts, newer vehicles can include newer technology such as the following.
5. Avoid tying up your money
Often the costliest aspect of motoring is the loss of value a car suffers over time, which is known as depreciation. When buying a car it’s sensible to consider how long you might keep the car for and try to work out how much it might be worth by the time you come to sell. However, it’s difficult to place an accurate figure on what your car might be worth by the time you want to change it.
By leasing your car, the risk associated the above unknown is taken on by the finance company. As your payments are fixed, you know exactly what you have to pay, and at the end of your contract, you simply return your vehicle.
6. Take control of your monthly spend
Excluding fuel and insurance payments, when you lease a car you know exactly how much it’s going to cost you because you have one monthly payment. And if you include a maintenance package, your ability to budget becomes evens stronger.
7. Avoid hassle of MOT
Cars don’t need to have an annual road worthiness check until their third birthday and by that time the car might not even be yours any more. So yet another potential saving.
8. Avoid the troubles of PCP
Many PCP deals and similar finance products require a 10-20% deposit, making the initial payment particularly painful for your finances. With a lease you can drive away a brand-new vehicle from as little as one monthly rental payment as your initial charge.
With personal contract hire leasing you simply hand the car back at the end of the lease. You’re then free to choose the next car you want to lease. Whereas with PCP there’s always the chance you’re left trying to haggle over the final versus estimated value of the vehicle. Another potential issue with PCP is having to either negotiate a part exchange with a dealership on your next vehicle or having to buy it outright.
9. Tax relief for businesses
Not all businesses can afford to invest in a new car or a fleet, especially sole traders and other small businesses who may find it difficult to fund a new vehicle. According to BVRLA, leasing accounts for one in eight cars and one in five of all vans on Britain’s roads In 2018 there were 1.9 million corporate cars on UK roads and over 600,000 light goods vans put through company leasing arrangements.
With car leasing you can take advantage of a range of tax breaks if you’re a business owner. For example, VAT registered business owners can claim back 50% of VAT on a car or 100% of VAT on commercial vehicles. Please note that you put your vehicle through the business you’re subject to paying company car tax.
We will shortly be posting a blog on the tax benefits of leasing vehicles and will update this post with the link soon.
10. Simple process
If you need advice or assistance on leasing a vehicle, and finding the right car or van to meet your requirements, we offer the following straightforward steps:
a. Choose your car with assistance from a dedicated account manager
b. Get a quote
c. Apply for finance
d. Sign your contract
e. Decide on a delivery date
However, before you take out a lease contract, it’s important to consider that:-
- If you settle the contract early, you will be required to pay a termination fee
- If you exceed your agreed annual mileage allowance, you will be required to pay an excess mileage fee
- At the end of your contract, you will be required to pay for any damage to the vehicle, with the exception of fair wear and tear
Fleet UK is an independent specialist for car leasing and business leasing. Our customer service is exceptional and the 5* customer reviews on Google are testament to the advice, service and value we provide.
Browse our extensive range of car leasing deals here or simply speak to one of our experts on 02392 245572.
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Disclaimer: All vehicle images and descriptions are for illustration and reference purposes only, all vehicle leases are subject to credit approval and subject to change at any time. E&OE.
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