5 things to look out for in a car lease

There are many important factors when deciding whether you should go ahead with a lease but below we list some of the most important things to look out for on a lease before going ahead?

  1. Monthly Payments – Probably the most important aspect of a lease is the monthly payments. Once you sign up for a lease you will be legally liable for the monthly payments so make sure you think long and hard before agreeing. Can you really afford to pay this amount every month? Could you circumstances change over the course of the lease that may affect your ability to pay? If you want to exit a lease early there is almost always a termination fee so make sure you will be able to pay every month if possible to avoid this.
  2. Initial Rental – The up front payment, deposit or initial rental is a one off fee that you pay at the beginning of the lease. This is often expressed in number of months of the rental. For example if the regular monthly fee is £200 per month and the initial rental is 6 months then you will have to pay £1,200 up front before you can get your new car.
  3. Number of Years on the contract – A small monthly fee might see like a great deal but if the contract is for 3 or 5 years you may end up spending a fortune on the car. Why not use our handy calculator to see if it really is a good deal or not?
  4. Hidden costs – Make sure you have uncovered any hidden costs before you sign. Some key things to look out for might be:
    1. A delivery fee
    2. Administration fees
    3. VAT – often prices don’t include VAT so you may need to add 20%. Ouch
    4. Service fees – Check to see if your lease includes servicing, often they don’t
    5. Wear and tear – charged when you hand back the car
    6. Excess mileage – again this is charged at the end of the lease, it’s normally better to agree upfront how far you will drive during the leasse
  5. Interest rates – Car leases are a form of loan so you will be paying interest on the lease. Unlike a car loan you may not know what the interest rate is so it can be a good idea to ask the leasing company to make sure you aren’t getting ripped off.

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