Most of us need a car. We use them to commute to work, for shopping, travelling and exploring. There are a variety of different ways we can acquire our cars and leasing is one such way. You may be thinking “can I lease a car?” and in most cases, the answer will be yes.
There are different scenarios you need to consider when it comes to leasing. These include what type of car leasing you will wish to consider and whether you have a deposit. The more specific question depends upon your credit score and if it is a good credit rating or a poor one.
What is car leasing?
In simple terms, car leasing is an agreement between a customer and vehicle supplier. You can drive away with a new or used car for an agreed length of time after paying an initial deposit and agreeing to a series of regular monthly payments.
The first thing to consider is whether you will be able to afford the monthly payments. The monthly payments vary on how much of a deposit you have, how long you wish to lease the car for and the type of car you have chosen.
Following that, you must decide on the details of your agreement. These include what your annual mileage will be for each year of the agreement and you will have the details of what options ou will have in the future explained to you.
Type of car leasing
You have a variety of finance types to choose from in order to lease a car. Personal Contract Purchase allows you to lease a car and at the end, give you three different options. You can return the car with no additional costs. If you wish to own the car, there is an option to pay off the value of the car. This is known as the balloon payment and is calculated by the dealer at the beginning of your agreement. Third, you have the option to upgrade to another car and another leasing deal.
Personal Contract hire is similar to a PCP deal without the chance to own the car at the end. You can lease the car for the agreed period of time and when that is over you must hand the car back. This option is best for those concerned with depreciation.
Deposit or no deposit?
On the majority of leasing deals, you will be required to have a deposit. This deposit can equal 3-month, 6-month or 9-month’s worth of monthly payments. This gives you some level of flexibility when it comes to being able to afford your deposit. Again, the more of a deposit you pay, the more likely you are to have cheaper monthly amounts.
However, some of you might not have a deposit to put down. Does that prevent you from leasing a car? No, it does not. You can easily get a leasing agreement without a deposit. If you do choose to go that route, you must realise that your monthly payments will be higher than if you did pay a deposit.
What if I have bad credit?
In the past, bad credit might have prevented you from being able to lease a car. However, this has changed. If you have bad credit, you are able to finance or lease a huge range of cars. There are still financial implications if you do have bad credit and there is no guarantee you will be accepted. For example, we will consider every customer no matter their credit score, but our lenders do not accept everyone we consider and therefore we cannot guarantee you the chance to lease a car.
If you do have bad credit, you will also be expected to pay higher monthly payments. This is because there is more risk for our lenders and therefore your interest rates are likely to be higher. But if you can afford the monthly payments and the deposit and have bad credit, then the likelihood is that you will be able to lease a car.