HOW CAN YOU CAPITALISE ON CAR LEASING SPECIAL OFFERS?

• Part one – What is leasing and what about other methods of finance?
• Part two – What are the benefits of car leasing?
• Part four – Jargon buster / car leasing glossary
• Part five – Frequently asked questions about car leasing

For the financially savvy, car leasing is a cost effective way of driving a new vehicle every few years. However, to really grab the best deal you must keep an eye on the marketplace as different car leasing companies offer exclusive eye-catching deals that are arguably much more extensive and wide ranging than those available on car purchases.

In this section we’ll take a look at these special offers and how they come about.

HOW DO CAR LEASING COMPANIES OFFER SPECIAL DEALS?

As you search around for the best car leasing deal you will often hear of ‘special offers’. However, it’s natural to wonder what motivates a leasing company to offer a special promotion?

Fear not, it’s not likely that there’s anything wrong with the car! It could simply be due to a large stockpile of vehicles, poor manufacturer sales or other factors:

• Poor manufacturer sales – If you want to pick up a cheap deal then scout around the market towards the end of the year. This is because many manufacturers will not have met their sales figures for a particular model and so they are willing to subsidise financial deals in order to meet their targets. This benefit is passed on to the customer through cheaper leasing offers.
• Large stockpile – If a manufacturer is introducing a new shape or model of a certain vehicle, then it might be necessary to clear out as much of the ‘old’ shape as soon as possible. Make sure you keep a close eye on the market around the times that new car registrations are introduced.
• Bulk deals – Some finance companies will negotiate deals with a manufacturer in which they buy in bulk in return for a discount. This can mean that they acquire 20-100 vehicles in one swoop and then they will push these deals out to brokers in the form of discounted rentals. By using a website such as ContractHireAndLeasing.com you will be able to quickly compare the deals available from a range of online brokers.

WHY DO TRADITIONALLY EXPENSIVE CARS SEEM SO CHEAP WHEN LEASING?

One of the main advantages of car leasing is that you will be able to secure better deals on the cars that are usually higher-priced because of their high residual values.

The amount you have to pay on a lease agreement is worked out with a simple equation:

Dealer’s price – residual value = Cost to lease vehicle.

Consequently, the higher the residual value of the car, the less you have to pay. With many of the typically higher-priced cars, the residual value is high as they don’t depreciate as quickly as other vehicles. This means that you get a better deal.

For example, both BMW and Audi cars have high residual values. As such, dealers will rarely offer a discount of more than 11-13% off as you will already secure a low cost deal thanks to the car’s residual value.

By contrast, Ford cars, which traditionally don’t hold their residual value quite as well, often have their initial prices slashed by dealers to make them competitive. So whether you’re in the market for a luxury car, or just a regular vehicle, you can benefit from a competitive leasing market as companies compete with each other for your deal.

WHICH TYPES OF VEHICLES ARE TRADITIONALLY LEASED AT DISCOUNT PRICES?

Diesel vehicles are traditionally much cheaper to lease than their petrol counterparts – and this is largely due to the influence that the company-car market has on the leasing industry.

Many big businesses like to lease cars in bulk which they then allow their employees to use. Company cars are traditionally upgraded every few years and this is because they are subject to lease agreements. Diesels are particularly popular with businesses because of:

• Lower company car tax – A company will usually pay less tax on a diesel vehicle than on its equivalent petrol counterpart.
• Better fuel economy – Most diesel cars collate more miles to the gallon than petrol vehicles. Consequently they are particularly popular among large companies that pay their employees’ travel expenses. The more miles they collate per gallon, the less the company has to pay!

While businesses have had a huge effect on the car leasing industry, personal car leasers can use this to their advantage. By searching for a diesel model you will almost certainly make savings – check out the diesel models available at ContractHireAndLeasing.com and compare them to their petrol equivalents to see the savings you could be making.

WHAT CAN YOU DO TO REDUCE THE COST OF YOUR LEASE AGREEMENT?

It’s very rare that a customer would go to a car showroom and agree to pay the full price that the dealer has on display in the car window. Instead, most customers haggle – and there’s no reason why you can’t apply the same philosophy to leasing!

A leasing price can be reduced by a number of factors – from factory-to-dealer incentives to your own hard work. Always try and talk the dealer down and remember to ask for the true cost of the lease – that is the final bottom line that you will be paying each month.

You can also use your own assets to your advantage. Offering a trade-in or a cash down-payment will further cut your leasing costs, especially if you have a short-term lease.

And remember to pay close attention to the residual value of a vehicle. The best cars to lease should have a residual value that is at least 50% of the manufacturer’s suggested retail price.

Before you contact a dealer it’s important to familiarise yourself with the jargon associated with car leasing, which we will examine in part four.

Move on to part four of the car leasing guide…