Leasing is a quickly growing market in the UK. It’s especially attractive to people who want to change their car regularly, and don’t want the expense of paying the entire amount up front. If it’s something you’ve been thinking about, there are both advantages and disadvantages to this method of financing.
Leasing – The Advantages
- Get a better car – taking a lease deal usually offers the opportunity to get into a better car than you could afford outright. A newer, better car is often more reliable too.
- No-hassle – one of the main benefits for many people is the “no-hassle” aspect of leasing. As it’s not your car, you don’t worry about insuring it, servicing it, getting a MOT or taxing it. The leasing company takes care of all of that for you, and all you need to do is add fuel.
- Walk away – at the end of the lease you can just hand the car back to the lease company. Then, if you wish, take out a new lease agreement for another new car.
- No nasty surprises – as lease agreements involve a set monthly payment to the finance company, there are no nasty surprises and bills in store should your car need work in the garage.
Leasing – The Disadvantages
- Ownership – a leasing agreement is like a long-term hire. You never actually own the vehicle and at the end of the agreement, the ownership of the car reverts to the leasing company.
- Excess mileage – perhaps the biggest disadvantage is excess mileage charges. If you’ve underestimated the mileage stated when you signed the agreement, the cost for each additional mile can be extremely high.
- Damage – leasing companies don’t expect your car back in a brand new condition and will make allowances for fair wear and tear. However, any scratches, bumps and dings will be detailed when you drop the car off, and you’ll be invoiced.
- Restrictions on garages – leasing companies usually have agreements with chains of garages or tyre centres to fix all of their vehicles. You might be asked to take your car to a location which isn’t particularly convenient. As it’s not your car, you’re in no position to argue.
Leasing is generally available on new, or nearly new vehicles only. For older cars, it’s usually more advisable to take a bank loan or dealer finance, and deal with the servicing, MOT and insurance costs yourself. Once you’ve paid off your finance the car is yours, and you are free to keep it or sell it on as you wish.
Everyone has different circumstances and there is no right or wrong when it comes to a decision between buying or leasing a vehicle. The best advice is always to look properly into each option, and work out exactly what both methods are going to cost you over the entire time you have the car. There are also several lease companies around, so if you do decide leasing is for you, shop around for the best deal.