By Tom Roberts
Leasing has become a popular method of motoring in recent years, as an alternative to buying a car outright or on finance. From fixed monthly payments, to accessing the latest makes and models, we outline the key considerations of car leasing.
Benefits Of Car Leasing
A car lease offers many advantages over car ownership, making it a great option for many motorists – regardless of the type of vehicle you’re looking for. Find the key points below, or scroll on for more info:
Fixed monthly payments across all budgets.
A brand-new car every few years.
Manufacturer warranty and tax included.
No worries about depreciation.
No need to worry about selling the car on.
Low, Fixed Monthly Payments
Leasing can often work out cheaper than alternatives, such as financing a car through a Personal Contract Purchase (PCP) agreement. As PCP is often available with zero deposits, the monthly costs are pushed up and include final balloon payments if you want to own the car.
However, car lease agreements are essentially long-term car rentals, with depreciation already factored in and road tax covered by your payments.
You run the car for 2-5 years and simply hand it back at the end of the lease. And the lease payments are fixed for the duration of all deals, as agreed before the delivery of your new vehicle. At Vanarama, we also cater for many different budgets, starting with car leasing for less than £150 per month.
Business customers can also claim back VAT on their leasing costs. To find out if you’re eligible, get in touch with our helpful team.
Drive A New Car Every Few Years
If you like the idea of upgrading to a brand-new car more frequently, a lease deal is likely the best option for you. At Vanarama, our agreements last as little as 2 years, meaning you could be driving the latest models much more often.
Not only will most lease customers benefit from manufacturers’ warranties (generally 3 years) for their entire agreement, but they will also get access to the latest automotive tech and safety features.
If electric cars are your preference, upgrading every 2-5 years gives you access to the latest electric vehicle (EV) technology – including the models with the highest driving range and most efficient charging.
Maintenance Packages Add Peace Of Mind
As well as most lease durations being covered by the manufacturer’s warranty, there’s the option of adding a maintenance package for complete motoring peace of mind. From only £18 extra per month, which is added to your usual monthly payment, it includes routine servicing and maintenance, full RAC breakdown cover and tyre replacements – among many other benefits.
Our maintenance packs can make car leasing an even more financially savvy choice, reducing the chance of unexpected costs, and allowing drivers to budget more effectively.
You Don’t Need To Worry About Depreciation
Over time, all cars depreciate – meaning their value decreases, mainly down to age and condition. But, this is already accounted for within your monthly payments (also referred to as monthly rentals). And because a lease car is always returned to the leasing company at the end of an agreement, there are no balloon payments to keep the car. If you’ve kept to the pre-agreed mileage limit and the car’s in good condition, including fair wear and tear, there’ll be nothing more to pay.
At that point, you can then upgrade to another brand-new car – without the hassle of having to trade in or part-exchange your previous vehicle.
What Are The Disadvantages Of Leasing A Car?
Although leasing will be a great option for many motorists, it’s worth being aware of all the details so you can make an informed decision on your next car.
You never own the car.
You may be charged for damage and excess mileage.
There are limitations to be aware of.
There Is No Option Of Ownership
As leasing is like a long-term car rental, there is no option of ownership at the end of the lease. Instead, the car is returned to the leasing company and you have the choice of upgrading to another brand-new car.
For those that wish to own their car, or plan to run it for longer than 5 years, buying outright or on finance may be the best option.
You May Be Charged For Damage And Excess Mileage
As lease cars are generally driven for 3 years before being returned, minor wear and tear is expected. At Vanarama, only damage beyond the British Vehicle Rental and Leasing Association’s (BVRLA) Fair Wear & Tear Guide is chargeable. This includes damage from impact and harsh treatment, so you don’t need to worry about minor bumps and scratches from regular use.
Excess mileage is also charged for each mile over the pre-agreed limit, but the easiest way of avoiding these costs is to overestimate your mileage before starting a lease agreement – this way, you’re much less likely to incur any excess mileage charges.
You Need To Be Aware Of Any Limitations
As car leasing is like taking out a long-term car rental, there are some stipulations you need to be aware of as part of your agreement. For example, if you plan on driving the car abroad, this should be possible but you will need the leasing company’s permission and documents before doing so.
Car leasing deals also require hard credit checks before agreements can be finalised, to ensure the monthly payments are affordable, but this is the case with purchasing a car through finance, too.
Our team of experts is available to help with any queries you may have prior to leasing, or if you need a hand through the process.
Why Lease A Car Over Buying?
Car leasing has clear benefits for many drivers, such as upgrading to a brand-new car every few years and covering almost all of your motoring costs within one monthly payment – but it’s important you know a car lease agreement is right for you before taking one out.
Our experts have created a host of helpful content on car leasing – from guides on car leasing and how it works to helping you decide whether buying or leasing is right for you.