Leasing 101 – The basics
Why should I lease my next car?
Leasing is another method of financing your next car. Typically you’ll have to decide whether to buy outright for cash, taking out a bank loan or perhaps even a finance plan offered by the dealer such as PCP. Each method has it’s own pro’s and con’s so you’ll have to do the maths and decide which method is most suitable for you.
Leasing your next car is a popular way to run a brand new car with regular and predictable running costs while being covered by a manufacturer’s warranty and breakdown cover. It’s a similar process to hiring a car on holiday but over a much longer period – typically 2-3 years. You’ll know exactly how much you are paying each month (excluding insurance and petrol) and you won’t have the hassle of having to sell the car or negotiate with the dealer at the end of the agreement – the car is handed back at the end and you’ll move on to the next one!
Here at LeaseBeast we love and specialise in advice for those of you looking for your next leased car. Timing is everything so we will help you find when manufacturers are trying to clear stock, promote a new model or boost the used car market in the future all to find you some fantastic deals!
Will I own the car?
No! One thing to note is that you will never own the car nor will you ever see the log book (V5C). This remains registered to the finance company and they take care of the road tax for you. You really are borrowing someone else’s car over the 2/3 year agreement!
Why would I want to drive someone else’s car?
The simple answer is that it really doesn’t matter. The key thing with leasing is determining how much the lease is going to cost you over the agreement and calculating how much the car would cost you over your anticipated ownership via each of the different financing methods.
Leasing a car might cost you £6,000 over 2 years and at the end of it you hand it back leaving you without a car and no equity. However, owning that car or financing it via the dealer may have cost you £8,000 to £10,000 over the same period. The key to a successful lease is to beat the depreciation! See an example HERE
How leasing a car works?
Typically leasing brokers post deals to their websites or newsletters via email. You’ll need to pay an initial rental (your first payment), a number of monthly payments, sometimes an administration fee. This is covered in more detail HERE