This was a question that we were asked recently – it’s not an uncommon one, especially as personal leasing is a relatively new concept.
So, we've noted down some of the benefits of leasing to reassure all of you leasing newbies that it's a great route to driving a brand new car.
Leasing (sometimes known as contract hire) has always been a popular way of running a car for businesses because very few, if any businesses would buy cars outright for their employees.
As individuals we’ve historically taken out a loan to buy a second hand or brand new car, signed up to finance direct with the car dealer or saved our hard earned cash and paid outright.
However, cars depreciate (lose money) really quickly. The average new car will have a residual value of around 40% of its new price after three years (assuming 10,000 miles/year) or in other words will have lost around 60% of its value at an average of 20% per year*
Depreciation isn’t an issue when you lease. You get the drive a brand new car for 3 or 4 years (depending on your agreement) and hand it back at the end. That’s it! You can either lease again or take a different route to get behind the wheel.
Unexpected repair costs associated with car ownership are also a factor in individuals deciding to lease. A brand new cars is going to be more reliable than something used, you can opt in for a maintenance package which covers all servicing and you won’t have to worry about MOT’s. The added inclusion of manufactures warranties, road fund license and breakdown cover (depending on your agreement) give leasers complete piece of mind.
Selling a car can be a pretty stressful experience – from dealing with a private sale to feeling your car has been undervalued in a part exchange situation, moving on to your next car when leasing carries none of this hassle.Still not convinced? Read our ‘diary of a first time leaser’ to find out more
* Source – www.theAA.com