Car leasing is becoming more popular in the UK as it allows drivers to replace their cars frequently and to have the latest, safest models for themselves and their families without spending a fortune.
Most often, you’ll make a down payment, which can be anything up to 20% of the car’s market value, then make a monthly lease payment. Once the lease term is up, the car is returned to the dealer and you can start a new deal.
The drawbacks of leasing
There are a few downsides, but they’re not huge. As you may imagine, you don’t own the car; you’re essentially renting it. When your lease ends, you don’t get your down payment back.
Your lease terms may well have stiff penalties for going over your mileage allowance, or for neglecting the interior and exterior of the car. You might also have to pay a penalty if you’re a hard driver and there’s unreasonable wear and tear.
This is fair enough, in reality, but the upsides of leasing more than make up for the downsides.
Leasing a car is an ideal solution if you don’t have enough money to buy a new car, especially if the car you fancy is a bit out of your budget. It also works really well if you know you won’t go over the car’s annual mileage limit. If you are careful and like to keep your car clean, you’ll avoid penalty fees, which can even be applied in business car leasing.
How to lease a car
Leasing a car can actually be simpler than buying one, but you need to follow some tips and steps to help you to get the best deal.
Sort out what you need
What sort of car do you need (or want)? If you have a growing family, you may need that people carrier, or you might just fancy checking out your dream Audi leasing special offers – finally!
Choose your ideal wheels
Make a shortlist of your ideal models within your budget. If you want to keep costs down, you can opt for models with high fuel efficiency and low insurance premiums.
Go for a spin
Have a test drive in your shortlisted models. Look at braking, comfort, steering and shock-absorption, among any other factors that are important to you.
Safety first
Look for anti-lock brake systems, side airbags, roll bars, stability control and so on. Go for a model with as many safety features as you can afford.
Do the maths
Compare the leasing deals on offer, focusing on your monthly payments.
Strike a deal
Return to the dealership and settle on a price with the dealer. However, don’t tell them that you intend to lease until you’ve struck that deal. Your monthly payments will be worked out from that final price, as well as your down payment.
Start at rock-bottom
Find out what the wholesale price of a new car is to the dealer and use this as your starting position. Your eventual price will be somewhere between this price and the full retail price.
Start your lease
Make as big a down payment as you can, as this will reduce your monthly payments. Of course, as with any rental agreement, you’ll face penalties for missed or late payments, so you need to be sure you can manage them.
