When it comes to acquiring a new car, we all have different requirements in regards to how we will finance it. Everyone recognises that purchasing a car is far from a sound investment – it’s quite the opposite unfortunately – and as a result we are finding new ways in which we can get what we want without taking too much of a hit. That’s where car leasing comes into the frame.
Personal car leasing, or personal contract hire, has become a very popular way of getting your hands on a new car. Leasing a car allows the driver to essentially hire the car and removes most of the hard financial decisions, such as getting a bank loan.
Why lease a car?
The depreciation of a car’s value can be a pretty depressing issue, and that’s where car leasing really comes into the fore. Although you’ll never actually own the car, this is indeed a great advantage when it comes to swapping for another new model.
From you moment you leave the dealer forecourt, the car begins to lose its value. With leasing, you are paying a monthly fee in order to use the car as opposed to paying a balance and probably getting less than half of it back when you trade in.
Payments when leasing a new car tend to be around 40 per cent cheaper than that of those when paying back a bank loan. Deposits are also a great deal cheaper and usually a fee amounting to around three monthly payments is required.
As a result, car leasing allows drivers to afford cars that they might not have ordinarily been able to with purchasing.
Further financial benefits sees costs such as MOTs, tax and servicing all paid for as part of the deal. On top of that, drivers are easily able to drive away with a brand new car every two or three years and take advantage of models at the peak of technology and efficiency.
Comparing leasing to purchasing
When a driver looks to use the option of hire purchase, they would need to put down a deposit of around 20-30 per cent of the car’s value and then the rest of the balance is paid off over a certain period. At the end of this agreement the car is now the customer’s property, but the car is worth far less than it was at the beginning.
Taking up personal contract purchase would see the customer put down a significantly lower deposit and then pay lower monthly payments, too. At the end of this agreement, the customer can either hand the car back and get another on a second deal, pay a balloon fee to make the car theirs or walk away completely.
If you feel car leasing is the right decision for you, take a look at the great car hire rates at Listers.