ad | Getting a new car can be a really exciting moment, especially if you’re really into cars. And driving a nice car can really give you that boost of confidence, not only on the road, but within yourself as well. However, not all of us have the money to spend on a newer model, so car leasing can be another great option.
What is car leasing and how does it work?
Car leasing is an affordable and hassle-free way of being able to drive and enjoy a new car. Essentially, you are renting the car for a period of time. Similarly to when you rent an apartment, you do not own the apartment when your rent is up. This is the same for when you have car lease.
You will not own the car at the end of your contract and will be paying regular, usually monthly deposits (or “rent”) over the course of usually two or three years, as well as an initial deposit upfront. Car leasing isn’t about paying monthly for a car that will become yours at the end of it.
It’s very likely that you will have to agree to an annual milage limit when you sign your credit agreement when leasing a car.
What are the advantages and disadvantages of car leasing?
Of course with any sort of investment or anything that you’re putting money into, there will be benefits and disadvantages which you should weigh up, depending on your individual circumstances.
Advantages if leasing a car:
- You can drive a brand new / newer car for a cheaper price
- Car tax is included in your lease agreement, so no need to worry about it
- Every lease vehicle is covered by a manufacturer’s warranty and comes as standard
- Fixed payments every month that don’t fluctuate
- No long-term commitments, so ideal for someone who loves changing their car
Disadvantages of leasing a car:
- If you terminate your contract early then you will have to pay a termination fee
- If you go over your annual milage limit, you’ll have to pay a fee
- You will have to pay for any damages or wear at the end of the lease
- You won’t own the car in the end, so may not be for you if you want to own your own car
So, let’s bust some myths!
If you’ve never leased a car before, chances are you’ve heard some myths around it from others who have and have got their information wrong.
Good rule of thumb is don’t take what people say at face value, until you do your own research and speak to the professionals yourself! The same can definitely be said for leasing a car, so here are some common myths and misconceptions you might have heard:
Large upfront payments are required
Not always! There are usually options available which enables you to put down a large sum IF you want to, which will then lower your monthly payments over the course of your contract. If you don’t have a large sum to put down? Then you can definitely put down a lower deposit!
Car leasing is a waste of money
Definitely not! The total cost of a lease generally costs less than the expected depreciation of a vehicle over the same term and you only pay for the difference between the purchase price and the residual value. This means you could potentially be able to afford a more expensive car on the same monthly budget, woo!
Can’t take a lease car abroad
Wrong. You absolutely can take your leased car abroad. You will just have to get in touch with your finance company to get the authorisation and documentation you need and away you go!
Leasing is for businesses only
Definitely not. You can lease a car for personal use or business use.
You must have a great credit score to lease a car
Not necessarily. A good credit score can definitely help but when it comes to leasing a car, there are more flexible options than you might think. However, you might want to check out this post about how to improve your credit score, if it’s something you are looking to improve.
Leasing is a complicated process
Not really. Most places where you can lease a car from make it quick and as simple as possible. All you need to do is choose your car, get a quote, apply for finance and the rest is done for you.
Leasing a car has many benefits can obviously comes down to your personal preference and circumstances. But if you want to drive the latest models, have no long-term commitment and the ability to switch up your car every few years for affordable monthly payments, then it’s definitely something to consider!
