Why leasing could be one of the best decisions you’ll ever make
Looking at replacing your car? Thinking about giving leasing a go? Obviously we’re going to say it’s a good idea, but we’re here to prove it, with five reasons why leasing could be the best way of getting you behind the wheel of your next car.
Replacing your car? Considering leasing for the first time? Naturally we’re going to say that leasing is one of the wisest decisions you’ll ever make.
But rather than say it, we’re going to prove it, with five reasons why leasing is not only be the best way of getting you behind the wheel of your next car, but every car you ever drive for the rest of your life.
Premium brands become more affordable
Classy cars are expensive, right? Well, yes, but if you lease them, they don’t have to be.
There are two reasons for this. The most obvious one is that finding £30-40k to hand over all at once isn’t an option for most people, but the second, less obvious reason is that premium models are sometimes available for a similar monthly outlay to their less prestigious competitors.
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That’s because cars from the likes of Audi, BMW, Mercedes-Benz and Jaguar often have higher residual values than the Nissans and Peugeots of this world, so once you’re done with a car the dealership or broker you leased the vehicle from will sell it on for a larger amount.
As a result, they can afford to charge you a lower monthly rate and suddenly the amount you’d normally put aside each month to drive a Citroen will put you behind the wheel of a Mercedes.
Low down payments and lower monthly repayments
Other than leasing, and assuming you’re not going to buy a new car outright, the other way of driving a new car is on finance or via a loan.
Either way, you’ll have to put down some serious cash before you drive off into the sunset with a new motor.
This is partly in order to make the monthly repayments more appealing and partly because, if your promises to pay turn out to count for nothing, the dealer has at least made some money from the deal.
There’s a problem with this though. If you’re coughing up thousands of pounds to reduce your monthly expenditure by a couple of quid a month, you’re effectively giving away your money months or years ahead of time. Why? It’s better in your bank account for another few months, earning you a little interest.
With a lease, however, you stand a fair chance of getting a lower down payment and you have the added bonus of paying less each month. That’s possible because whereas with finance you pay for the car, plus interest, with a leasing deal you’re only paying for the depreciation, which brings us on to our next point…
A car’s value plummets by at least a few grand as soon as it leaves the showroom, it’s common knowledge and it’s true.
Chuck 36,000 miles over three years into the mix and that car’s value is looking pretty sorry for itself.
Because lease companies can often get discounts on cars from the manufacturers, effectively reducing the depreciation, they sometimes pass that saving on to you.
Avoid repair costs
Leasing deals sometimes include all the maintenance costs of a car for the period of its lease. That means that servicing will be free, and anything that breaks when it shouldn’t will be covered by the warranty anyway, because lease agreements are generally shorter than warranties.
That means you’ll just have to insure it and add fuel – everything else will be covered by the leasing company.
A word of warning though: if your deal doesn’t include maintenance, don’t think you can get away with not maintaining the vehicle.
If a company gets a car back without a full main dealer service history, or with any dents or broken components, it’ll be worth less in resale value. They won’t cover that cost; you will.
Fixed price motoring
If you do get maintenance costs included in your leasing deal, you know that most of your motoring costs are fixed for the duration of the lease.
Okay, you might be stung by insurance and fuel price changes, but that’s the case however you pay for your car. You also have the advantage of not worrying about depreciation.
Imagine for a second that you’ve just taken delivery of a shiny, new, diesel-engined BMW 320d, which was reasonably priced because of its rock-solid residuals.
Now imagine that the government decides that diesel cars are too polluting and that from now on, all diesels will be subject to an enormous tax every time they change hands. The residual value of your Beemer would plummet. If you’ve leased the car though, it’s the dealer that’s going to suffer from the crushing depreciation, not you, because your prices are fixed.
You’ll always have new wheels
If you lease, you’ll never have a car that’s more than a few years old (three years is a typical lease term), so it should be reliable and full to brimming with the latest safety and infotainment kit.
Plus you’ll be able to hear the neighbours gossiping about how well you’re doing for yourself, getting a brand new car every couple of years. Good, eh?
It also means that if you choose a car which you’re not 100% happy with, you aren’t stuck with it for too long. And it’s much easier to hand a car back to a dealer at the end of your leasing deal than it is to sell it.