More and more people are turning to the lease option when it comes to getting behind the wheel. It’s an alternative to buying that can really help your finances. Almost every seller now offers a lease option alongside the purchase. It’s growing in scope and popularity. Most of those opting for the lease deal are lured in by the cheaper monthly payments. At first glance, it seems like a much more financially viable option. If you’re intrigued, but confused, we’ve got you covered. In this article we’ll look the intricate details of car leasing. Let’s take a look.
How does it work? – The easiest way to explain leasing is to think of it in terms of renting, or hiring. Much like renting a house, you pay a small deposit, followed by monthly installments for the use of the car. The lease runs for three to four years. At this point, you will hand the car back and opt for a new model on a new lease deal. Think of it as a long term hire. Of course, you never own the car outright.
Pros – The benefits here are numerous. First of all, the monthly payments are typically much lower than repaying a loan or finance option. That means your monthly car costs are less of a burden on your finances. You’ll also avoid the crippling effect of depreciation as you don’t own the vehicle. It also means you can afford a better car! You can opt for a newer model or increased upgrades. Every three years, you can make the move to a new, better car too.
Cons – The main drawback to leasing is that you don’t own the car outright. You can’t make any alterations, modifications or changes. You also don’t build up any equity in the vehicle. At the end of the term, you can’t sell it on and reclaim some of your money. There are also a few restrictions and additional payments involved with leasing which we’ll look at next.
Additional fees and restrictions – When leasing a vehicle, you are typically bound to a mileage limit. The lease is only valid if you stay under the agreed mileage. If you breach that limit, then you’ll incur additional charges on a ‘per mile’ basis. This can get very expensive if you end up using the car more than you expected. There are also charges for wear and tear above and beyond the accepted limit.
Is it cheaper? – This is the question you’re all asking! Quite simply, there is no right answer. It will all depend on the car you choose, your lifestyle and your car usage. Browse http://listers.co.uk to get a rough idea of lease prices on your next model. Then balance that against the equivalent price if you were to buy your new car outright. In some cases you’ll find it cheaper to buy in the long run. In others, it makes much more sense to lease.
Now that you understand the basics of leasing, you’re in a good position to do the sums. Make an informed decision and make the choice that’s best for your lifestyle (and your bank balance!) Best of luck with your new motor!