Historically, companies have been the main customers of car leasing companies. Instead of saving thousands of pounds to buy new vehicles or taking expensive car loans out, they would quite simply lease a brand new vehicle. However, as leasing has become more popular, business leasing is not the only market to benefit from car leasing as more and more individuals recognise how this increasingly competitive market can benefit them.
If you’re not too sure about the why’s and wherefore’s of car leasing here we explain just what car leasing is and why it could be your chosen route to getting a brand new vehicle.
What is car leasing?
Car leasing in simple terms is renting a vehicle. Businesses have been doing this for ages, but it is only in the last few years that personal customers have recognised the benefits as well. You basically agree how long you would like to lease a vehicle for, agree the mileage limit for that period, which will then give you a set fixed amount that you pay per month for your contract period. One of the most flexible things about car leasing is that if you know how much you can afford to pay each month you can search for the perfect car for you based on make, model, specifications, technology and colour for example. If you find a deal that’s a little bit to expensive you can normally adapt the deal to fit your monthly budget. Thankfully there are car lease comparison sites that can easily help you find the perfect deal to suit your circumstances.
The factors that influence how much your monthly payment will be are based on the value of the car (brand-new) you would like to lease, the estimated value of the car at the end of your agreed contract period – this takes depreciation value into account -(https://www.investopedia.com/terms/d/depreciation.asp) – plus your estimated mileage and length of contract.
At the beginning of your contract you will make an initial payment which is normally a multiple of your agreed monthly payments. Your monthly payment will then be fixed for the term of your contract.
At the end of your contract you simply hand the car back, it really is as simple as that! If you have kept the car in good working order, stayed within your agreed mileage then you’re free to start the process all over again with another brand new vehicle. Even if you have gone over your mileage there is normally an easy calculation that works how much extra you must pay based on pence per mile. It’s not recommended that you do this and if you think you will exceed your limit it’s always best to call your car leasing company so that they can discuss your options with you.
You can also include service and warranty packages within your contract so that you pay for these on a monthly basis which is also a good way to ensure that you keep the car in good condition as per your contract.
It’s the flexibility and known costs factors that are appealing to people across the nation and making car leasing a very viable option when they are looking to buy their next car. Visit the Money Saving Expert website for more advice and information: https://www.moneysavingexpert.com/car-finance/car-leasing/