While most of us are familiar with the process of purchasing a new or used car, it is fair to say that this is not for the financially faint-hearted. Aside from finding the money to purchase a vehicle, there are other considerations to be made, such as selling the vehicle when you are ready to upgrade.
This can be tricky. A new car can lose around 40 per cent of its value within the first year of its life; therefore, it is no surprise that some of us are turning to alternatives such as leasing rather than forking out a huge sum for very little to show for it.
What is leasing?
Car leasing is popular in the US, with over one-quarter of drivers opting to lease rather than own their car. Here in the UK, the concept has increased in popularity since the economic downturn in 2008. When leasing, you pay a deposit and then a monthly rate to rent the vehicle for a fixed period. The rate charged depends on the make and model of vehicle, a yearly mileage cap, and the amount of time you wish to lease it for. Longer leases are usually cheaper.
It is better to overestimate your annual mileage, as underestimating will result in a fee charged for every mile you go over your limit.
Car leasing Leicester: pros and cons
For some, ownership is an important part of driving, so being expected to hand back your car after your lease period has expired is unlikely to suit; however, for those who do not mind leasing, there are a number of benefits.
Vehicle lease prices are usually cheaper when compared with PCP or HP finance. This is particularly true with more expensive vehicles, such as the Jaguar E-PACE, which can be leased from providers such as https://leasing.totalmotion.co.uk for a sum considerably less per month than PCP. Road tax, servicing and breakdown cover can also be added, so you make just one payment. Business users can also claim 50 per cent VAT back.
Insurance is one of those things you have to be cautious of. Consider GAP insurance in addition to normal insurance to protect you from paying the difference between the value of the car company’s valuation and the insurer’s valuation. Failure to do so could be a costly exercise.