Published on Friday 22 January 2016 in Car news
The future of car buying is changing and car usage lies in leasing. This is a bold statement and supported by Rupert Pontin, Head of Valuations at Glass's, the publisher of the vehicle industry-standard - Glass's Guide to Car Values.
Rupert said: "Owning a car will very likely become a thing of the past for most. Once buyers start leasing, they tend to switch permanently. The chances of them opting to buy their next car, either outright or with a loan is low".
What are the benefits of leasing your car?
• You can drive a car that would be out of your price range if you were purchasing it outright
• Monthly payments are fixed, so you know exactly how much you have to pay, making budgeting easier
• You can get another brand-new car once your existing contract comes to an end
• You don't need to worry about selling your car or it losing money due to depreciation
• You'll receive a warranty with your new vehicle
• Road tax is included for the duration of your lease with Personal Contract Hire and for the first 12 months with Personal Contract Purchase
• Maintenance, deposit and repayment costs are lower than if you purchased the same car second-hand with a loan
Are you part of the pay monthly generation?
The way we purchase items is changing. You probably already pay monthly for either your mobile phone, gym membership or perhaps a subscription to watch films on Netflix. Now more people are considering paying monthly for their cars by leasing them. It's a good way to get and stay in a new car for less money.
To buy, or not to buy?
Whether you decide to purchase or lease your vehicle will ultimately depend upon your personal circumstances and preferences. If the points above and driving a new car every couple of years with reduced monthly payments appeals to you, then leasing would suit you. If you want complete ownership of a vehicle and are happy to keep it for a longer period of time, purchasing would be more appropriate for you.
After your property, your vehicle is likely to be your second largest investment. Both are different though. You expect your house to increase in price and accept that your car will lose value.
Billionaire oil tycoon J.Paul Getty said: "If it appreciates, buy it. If it depreciates it, lease it." This is one of the main advantages of car leasing, as you won't lose a vast amount of money due to your vehicle decreasing in worth.
How much cheaper is it to lease a new car than buying used?
Lower costs is a huge attraction of leasing cars. Monthly repayments through leasing will be on average 35% to 55% less, compared to those if you purchase a car with a loan.
What other ways can a new car save you money?
Servicing and maintenance costs of a new car will be lower than those of a used car. You never know exactly what you're buying with a used vehicle and you could be hit with an expensive bill from your local garage at any time.
When leasing you have the option to include a service and maintenance package. This covers you for all vehicle servicing, spare parts, puncture repairs and tyres. You also receive a warranty with a minimum of three years with a new car. This will keep your costs as low as possible.
With a new car you benefit from advances in fuel efficiency. Less trips to the petrol station is always a good thing! The Society of Motor Manufacturers and Traders reported new cars are 18% more efficient than the average car on the road.
Plan ahead to get piece of mind
If you decide to lease there are a number of important factors to consider. Make sure you use a company who is a member of the British Vehicle Rental and Leasing Association (BVRLA). This will give you peace of mind that you're using a trusted and reputable broker.
All leased cars will be checked for wear and tear on return and any excessive deterioration to the vehicle will result in a charge. By selecting a company connected to the BVRLA, you're ensuring that the standards of wear and tear are determined by the trade association, and not the broker. This means that your vehicle will be examined in a fair manner and you will not be charged for any insubstantial reasons.
Are you thinking of getting a new car or are you happy with buying used? Please let us know below. Alternatively, if you need any more information about your next vehicle, you can call us on 01442 835 769.