So you’re looking to lease a new car. With the multitude of information (and misinformation) that is circulated online, this can make a pretty simple process become needlessly stressful. You are choosing a new car after all! This should be an exciting time and not a time in which you are worrying about all of the jargon and complicated information that is found in many sources across the web.
This is why we have written our comprehensive guide to car leasing. This guide offers jargon-free, impartial advice on what a car lease is, the situations in which you may want to think about a car lease as well as the numerous benefits that you can enjoy should you decide to lease your next vehicle. So read on to find out more about going on the journey in leasing your first vehicle.
So What Exactly is Car or Vehicle Leasing?
When choosing to acquire your next vehicle, you have a range of options available. The main three options when looking to acquire a new vehicle are arranging for a lease, purchasing the vehicle outright or arranging for a finance deal which allows you to pay for the car in monthly payments. Buying your car outright is clearly different but as you pay for your car monthly for both a lease and finance deal, what is the difference between these options?
When you decide to finance your car, you will own the vehicle although you will be paying a fixed percentage on top of the overall value of your vehicle until the loan is paid off. Although there are lease options that allow you to purchase your leased vehicle at the end of the contract (called PCP or Personal Contract Purchase) usually you will return your vehicle at the end of the leasing period (called PCH or Personal Contract Hire.). There’s one more choice where you can get novated lease car getting financed through salary packaging.
Is Leasing the Best Option For Me?
Leasing a vehicle is not the best option for everyone and it really comes down to your personal needs and requirements. If you know how many miles you are going to travel in a year and want to drive a new vehicle every couple of years then leasing a vehicle is perfect for you. When you arrange for your contract, you will agree your permitted miles per year and there are additional costs added onto your contract should you exceed these miles in any given year. As businesses can also arrange for contracts through their companies, this is also a great option for those who are looking to drive new vehicles or obtain a new fleet through their business.
What are the Benefits of Car Leasing?
One of the main benefits of choosing to lease over other methods of obtaining a new car is that you can change the vehicle that you drive every few years. The average contract is around 2 years (the minimum contract length) but you are also able to arrange for 3 and 4 year contracts. After your contract is completed, you have the choice to purchase your vehicle if you have agreed the relevant PCP contract and this is again a great way to purchase your vehicle without worrying about the depreciation of originally buying your vehicle outright. If you are returning your vehicle then you are free to choose another new vehicle and start the leasing process all over again.
There are tax benefits associated with arranging for your business lease. In the UK for example, you are able to claim back VAT on your car lease which makes this a very affordable option for business vehicles. Leasing a vehicle is the perfect way to drive a new vehicle and pay for it with affordable, monthly installments in which you are in control of the original payment options.
Where Should I Go to Arrange for a Vehicle Lease?
The best way to look for a leasing company is to search online and research the companies that are offering various contracts. Some companies may match offers or quotations so it’s important to attain a number of quotations before deciding on which company to go with. Be aware of administration fees that are piled on top of your contract. Some contracts may seem low but this may be because of the fact that additional costs are added on at the end.
So there you have it, this is our comprehensive car leasing guide. Good luck on your journey in finding your next vehicle and if you are considering taking the leasing route, consider all of the benefits above and carefully consider all of the options that are available.
About the Author
Alexander Fox works for Intelligent Vehicle Finance who are one of the leading providers of business and personal van & car leases in the UK. Intelligent Vehicle Finance offer a range of lease deals for major manufacturers including offering their clients a mercedes lease.