The deals that are offered if you take out a car lease are without a doubt appealing and when you first consider leasing a car it’s hard to see how there can be any negatives at all. In all honesty, the idea is a good one and it’s a great way to be able to afford a car if you have no real way of buying one. However, just as you’d analyse the advantages and disadvantages of buying the car that you’re going to lease, it’s important to do the same with the lease deal that you’ve been offered.
o The first obvious advantage would be finances as leasing a car means that initially you won’t be losing as much cash as you would if you bought the car right out. Instead you might pay a small deposit along with a monthly fee for the duration of the contract. Monthly fees are generally a lot easier to handle than a one of large payment as the cost somehow doesn’t seem as steep.
o By leasing a car you will have the opportunity to drive a vehicle that would normally be way out of your price range. Because the monthly payments are much easier to handle than a one off lump sum you can afford more. If you would be limited to a £5,000 spend if you were to buy a car then your choice would be severely limited whereas when you lease a car the only thing limiting you is the amount you will have available each month.
o You will also avoid the hassle of selling your car once the contract is over along with paying for the depreciation therefore you won’t lose out on money during the selling process.
o You will always be covered by a warranty if you take out a lease car and you can just give the car back at the end of the contract – usually the end of the warranty – and take out a new one if you wish to.
o Your monthly payments are predictable throughout a lease so you can budget effectively. The price you’re offered when you go to take out a lease is the price you pay for the duration of the contract so there will be no surprise payments.
o One of the biggest downsides is that you won’t ever actually own the car so essentially you’re paying money to nothing. If you really do fall in love with it and want to keep it at the end of the contract then you will have to buy it for its remaining market value.
o You’re limited on the miles you can travel with many car leases because excessive mileage brings a car’s value down. You should also be aware that if you do go over the allocated mileage – usually 10,000 per year although some are more and some less – you will be faced with a bill for the extra and this is usually pretty costly.
o If you’re the sort of person who likes to keep a car for longer than a few years then leasing will definitely be a more costly option.