When it comes to getting a new car, most people tend to think about buying one outright. But leasing a car is becoming a more popular option as there are many benefits to it. If you don’t have the money to buy a car or you don’t want one that is second hand, then you should consider leasing a car.
How does car leasing work?
A car lease contract usually runs between 2 to 4 years but the length of the contract is up to you. If you like to get a new car often, then leasing is the option for you. As with getting any car, you need to make sure you do your research first. What car you choose will determine the amount you pay each month. A more luxurious car will cost more than a hatchback for example.
It’s best to work out your budget and then see what car fits into your price range and also suits your lifestyle. Once you’ve picked your new car, a processing fee is required which can be anything from £150-£200; this allows the broker or dealer to get your car up and running.
You need to be approved for finance first and agree the term of how long you will lease the car for as well as your mileage limit. Once the car has been ordered the dealer will arrange delivery.
What happens when the lease ends?
While there are benefits to leasing a car such as road tax and breakdown cover being included, the car doesn’t belong to you. So when the lease comes to an end, you will have two options.
The first option is you can choose to extend the lease on the car. Before the contract comes to an end, you’ll need to contact the finance company to check they are happy for you to extend this and if the monthly payments will be cheaper as the car is now considered an older model.
The second option is you can give the car back and if it is in great condition and you stuck to the agreed mileage there won’t be any additional charges. You’ll need to contact the finance company a few months before the lease ends to arrange giving the car back and usually they will collect the car for free once the agreement has ended.
The pros and cons of leasing a car
Leasing a car comes with its benefits but there are downsides to it too. If you’re looking for a brand new car, then leasing one is the lowest upfront and monthly cost. It also includes road tax and breakdown cover and sometimes servicing is also included.
Although you pay for the car each month, you don’t actually own it and you won’t receive any money when the car is eventually sold but on the plus side, you don’t have to worry about car depreciation.
Leasing a car is a simple option if you want a hassle-free way of getting a new car as long as you stick to the terms of the agreement.