It’s safe to say we’re champions of leasing, after all it’s in our name! Whether it’s new or used cars, we believe leasing makes the most sense when it comes to accessing the latest cars. Why? Well, we’ll get to that in a minute.
The Finance and Leasing Association (FLA) reported that the value of new car personal leasing grew 27% in the 12-months to January 2021. Plus, with more consumers moving towards going electric with their next vehicle, recent research by a competitor revealed that driving a battery electric vehicle on a lease is cheaper than funding the EV on Personal Contract Purchase (PCP – not to be confused with leasing). So, leasing is becoming a more enticing proposition.
A quick primer on leasing
Leasing (or Personal Contract Hire to give it its official name) is a process whereby you essentially enter into a long-term rental agreement giving you access to a new vehicle for a set period of time at a fixed monthly cost.
The monthly cost of the lease is calculated based on how much the car will depreciate across the term of your contract based on the mileage you will be driving as well as general wear and tear. Warranty and road tax will also be included in this monthly price if you’re leasing a new car.
At the end of the lease, if you have gone over your agreed mileage limit or there is damage beyond fair wear and tear, you are likely to be charged excess.
So why is leasing a car better than buying? Here’s a few reasons…
Typically lowest cost to access a new car
While Personal Contract Purchase (PCP) remains the most popular form of purchasing a new or used car, leasing has been proven to be the most cost effective way of driving a new car.
As touched on above, leasing involves paying a set fee to drive a car over a contracted period, with costs based on depreciation across the lease term rather than its value when brand new. Add to this the fact there is no APR involved in the lease price and no optional final payment (or balloon payment) and you can already see the savings to be made.
No large fees at the end of contract
One of the main reasons people tend to opt for a PCP contract is due to the flexibility involved and having the option to pay a fixed amount at the end of the contract to own the vehicle.
This balloon payment is typically a third of the overall cost of the car finance, and because it is a large lump sum, few drivers have saved for it or have access to that amount. For this reason the vast majority of people in a PCP contract will instead use the final value of the car as a trade in and enter into a new PCP contract on a new car instead.
Leasing nullifies this dilemma, as once your final payment is made and you reach the end of your contract term, you simply hand the car back to the finance company and are free to look for your next car with no extra costs.
Keep up with latest tech and trends
Because you have flexibility over the terms of your lease contract – it can last anywhere from 18 to 48 months – it means you can constantly have access to the latest tech and trends in the new car market.
With technology changing so rapidly and so much emphasis put on what the car has and what conveniences the car can offer to drivers, it’s safe to say technology is one of the most important aspects of driving a car now.
Leasing allows drivers to take advantage of this by having access to everything from Apple CarPlay and Heads-up Display to safety features like Lane Keep Assist and Adaptive Cruise Control. On top of this, with the government mandating that all new cars sold from 2030 will need to be electric, it allows those who lease to be early adopters to zero-emission technology.
Lease deals typically come with an optional maintenance package which you can add to your lease deal for an element of stress-free motoring. This ensures your annual servicing is covered and the vehicle warranty remains valid.
Maintenance packages generally come with a variety of other perks which can vary from provider to provider including mechanical and electrical repairs, fair wear and tear replacement, MOT if you have a long term lease, breakdown cover and more.
No costly repairs
We’re sure everyone has experienced the dread of an MOT on a used vehicle you’ve been driving for five years. Outside of costly MOT repairs to make your car road-legal, life can be unpredictable with unexpected breakdowns happening and potentially leaving you out of pocket too.
All of these worries become a thing of the past when it comes to leasing as, if anything does happen to your lease car during the term of your contract, you’ll be covered by the car still being under warranty.