Leasing cars in the UK is catching on, slowly but surely. It lets people replace their cars more often than they’d be able to otherwise, which is better for them, their families and the environment.
Very often, leasing a car involves making a down payment – usually three or more months’ worth of lease payments – and agreeing to pay a set fee each month for two, three or more years. Once the contract is up, the driver returns the car to the dealer.
The downsides of leasing
As with anything, leasing has some downsides, but they’re fairly insignificant and most can be avoided. For a start, you don’t own the car and you don’t get your deposit back at the end of the deal.
Then there’s the potential for harsh penalties if you go over your annual mileage allowance, or for messing up the interior and bodywork. If your dealership finds excessive wear and tear, then you may also be asked to pay for repairs.
It’s not all bad at all…
With care, you can avoid penalties and you might not be too bothered about not owning the car. If this is the case, then leasing is a good option for you.
It’s especially useful if you don’t have the funds available to buy your dream car outright, or to take out a loan (loan repayments are more expensive than lease payments). If you’re a careful driver and you’re sensible about your mileage, you could be behind the wheel of your dream car before you know it!
How to go about leasing
Leasing can often be simpler than buying or getting a car loan. You can find out more on this website, but you still need a quick primer before you get started.
Think about what you need
What’s your dream car? Or, if you have a family, what do you need most in a car? Be realistic, especially when it comes to your budget, and think about your lifestyle; do you have dogs, or are you planning another baby?
Draw up a shortlist
Make a shortlist of the most suitable models within your budget, but still think about how you can keep running costs down. One model might be just outside your budget but it actually works out cheaper because it has a better MPG than the others, for example.
Take a test drive
You can test drive your shortlisted cars. Check out the ride and handling, comfort, features as well as your other important factors.
Go for as many safety features as you can afford – side airbags, roll bars, anti-lock brakes etc. It’s always worth it.
Do some sums
Look at the various deals on offer, especially the ongoing payments.
Strike a deal
Agree on a price with the lease company, but don’t say you plan to lease until you’ve set that sale price. This is because your deposit and payments will be calculated from this price.
Start out with a lowball
Look at the wholesale price of the car and work from there. You’ll be able to get somewhere between the wholesale and the retail price.
Get the ball rolling
If you can make a decent-sized deposit you’ll reduce the ongoing costs, but if you can only drum up a small down-payment, be certain that you can afford the monthly payments.