Why Lease | Lease vs Buy | What is Leasing

It's Better to Lease

As an individual we always want the best value, smallest monthly payments, and regular change cycles that allows us to keep up to date with modern designs.

With Leasing you can change your car regularly – typically every two to three years, enjoy lower payments, peace of mind with reliability, and avoid any hidden costs.

This may not be the British-“ I want to own my car” attitude... but with current economic times, personal incomes coming under increasing pressure, surely “thinking outside the box” must come into play!

Owning a car outright does come with hidden costs!! Yes this really can be a pocket eater for the general motorist! Do we forget with haste when we buy a car the following factors....

DEPRECIATION of Vehicle –this can be as much as 65% over a 3 year period!!

So if a car was bought for £15,000 and depreciation of 55%.
The vehicle has costs YOU -£8250 over a 3 years , or £2750 per year, or £229 per month!!

Other Factors Include:

-Loan Purchase and interest Costs.
-Higher Road Insurance,
-Higher Road Fund Licence,
-Higher Servicing Costs,
-Extra MOT Cost.
-Extra Road-Side Assist Cost.
-Extra Fuel costs from car less efficient.

In the short term (2-3 years), leasing is cheaper than buying car with a loan, in the medium term (4 -5 years) the two methods are about the same, and in the long term (5 years +) it is cheaper to buy.

"The Lease"

The only money that is required up front is your first payment (usually equal to three monthly payments).

In effect you hire the vehicle for an agreed period of time and pay a fixed sum for the privilege. The fixed sum will take into account the average mileage you are likely to do. The higher the mileage, the higher the payment. But most contracts for the general customer are based on 10 to 15k per annum. If you did exceed the agreed mileage though, you will face further charges but the price per mile is fixed within the contract.

The lease can be just for the car, or can include servicing and tyre usage.

Terms usually range from 18 months to five years, and when the lease ends you simply return the car and walk away.

"The Loan"

Buying outright means a major cash outlay, or a high initial deposit, and after all payments have been made you will be able to keep the car at the end of the term.

But you will need to make a significant down-payment at the outset, and don’t forget that the company selling you the car will be charging interest on any money borrowed. Because you own the car remember you are responsible for the whole car from servicing through to road fund licence costs and MOT’s.

And at the end of the day your car will have gone down in value and will eventually bring you all the additional costs incurred by old vehicles going wrong.

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