Top 10 benefits of leasing a car
Are you wondering whether leasing a car is right for you? Perhaps you have never leased a car before and considering whether it makes more financial sense than purchasing a vehicle?
A few years ago, car leasing was relatively unheard of in the UK, despite that it was hugely popular in the US, where one in four cars are leased.
However, in the last four years, car leasing in the UK has become increasingly popular, as the ‘direct debit generation’ has become used to paying for things monthly, such as utility bills, insurance, and mobile phones.
With the buyer’s change cycle becoming shorter, more people consider leasing an excellent way to get and stay in a new car for less.
What is car leasing?
If you choose to lease a car on a personal contract hire basis, you will make a series of monthly payments for the duration of your lease agreement (typically 24 to 48 months, for example).
Unlike dealership finance or bank loans, you are essentially only paying for the depreciation of the vehicle over the rental term rather than the entire capital value. Instead of paying a large deposit, you can simply pay a small initial amount, usually equivalent to three monthly payments at the start of the lease.
Fleet UK has detailed the top 10 reasons why you should consider leasing next time.
1. You’ll get to drive a better car
The option to drive the latest car is not a luxury a lot of motorists can afford. But If you lease a vehicle, you’ll drive a newer and more technologically advanced car or van than if you had bought one. Why? With a car lease, you only pay the car’s depreciation for the lease period, not the car's value. This results, typically, in your monthly payments being lower in comparison to other forms of finance.
Buying a car can typically result in driving it for a decade or more. In contrast, leasing gives you the freedom to have the newest model every two to four years, complete with your choice of extras such as additional technology and driver aids. Plus, you can pick your own paintwork.
If you get bored with your car easily, leasing often works out the easiest and most cost-effective way to change your vehicle often.View all car deals
2. Drive a more reliable car
The older a vehicle gets, the less reliable it becomes, and you are faced with increasingly higher service, MOT and repair bills. No one wants to get landed with huge repair bills to replace a timing belt or fix a broken clutch. Research from Holts Lloyd International showed UK drivers are spending £21 billion a year preventing cars from failing. Breakdown costs can be expensive, and UK drivers are paying on average £559 to repair issues with their vehicles each year.
By leasing a car, that won’t be such a problem - because you’ll be driving either a new or nearly new model. Also, if something does go wrong with your leased car, it will usually be covered by the manufacturer’s warranty.
Plus, if you lease a car with maintenance, we will cover your car for routine servicing, repairs and tyres.View top car offers
3. Receive an excellent deal
Car leasing companies such as Fleet UK operate as independent vehicle brokers and receive daily real-time deals from dealerships and major finance companies in the UK. This means you can be offered the most competitive market rates available and help drive down your monthly costs.View all car deals
4. Enjoy the latest technology and safety features
By driving a new or a nearly new vehicle, you will benefit from the latest in-car technology, which is constantly ever-evolving. It is predicted that cars will change more in the next 5 to 10 years than over the last 50 years.
The latest technology encompasses improving road safety, lowering emissions and taking some of the stress out of driving on our busy roads. For example, a recent popular in-tech addition includes Autonomous Emergency Braking, which detects a potential crash ahead and prepares the car by audibly warning the driver or taking evasive action itself by applying the brakes. Many different car manufacturers such as Audi, Tesla, BMW, Ford, Skoda and Nissan have adopted this technology.
5. Avoid tying up your money
Often the costliest aspect of motoring is the loss of value a car suffers over time, known as depreciation. When buying a car, it is sensible to consider how long you might keep the car and try to work out how much it might be worth by the time you come to sell. However, it’s challenging to place an accurate figure on what your car might be worth by the time you want to change it.
By leasing your car, the risk associated with the above is taken on by the finance company. As your payments are fixed, you know exactly what you have to pay, and at the end of your contract, you simply return your vehicle.View all car deals
6. Take control of your monthly spend
Excluding fuel and insurance payments, when you lease a car, you know exactly how much it’s going to cost you because you have one fixed monthly payment. And if you include a maintenance package, your ability to budget becomes evens stronger.View top deals
7. Avoid hassle of MOT
Cars do not need to have an annual roadworthiness check until their third birthday, and by that time, the vehicle might not even be yours anymore. So yet another potential saving.View all car deals
8. Avoid the troubles of PCP
Many PCP deals and similar finance products require a 10-20% deposit, making the initial payment particularly painful for your finances. With a personal contract hire lease, you can drive away a brand-new vehicle from as little as one monthly rental payment as your initial charge.
With personal contract hire leasing, you simply hand the car back at the end of the lease. You are then free to choose the next car you want to lease.
One of the issues with PCP is that there is always the chance you are left trying to haggle over the final versus the car's estimated value.
Another potential issue with PCP is either negotiating a part exchange with a dealership on your next vehicle or having to buy it outright.View top deals
9. Tax relief for businesses
Not all businesses can afford to invest in a new car or a fleet, especially sole traders and other small businesses who may find it challenging to fund a new vehicle. According to BVRLA, leasing accounts for one in eight cars and one in five of all vans on Britain’s roads. In 2018, there were 1.9 million corporate cars on UK roads and over 600,000 light goods vans put through company leasing arrangements.
With car leasing, you can take advantage of a range of tax breaks if you are a business owner. For example, VAT registered business owners can claim 50% of the VAT on a car or up to 100% of the VAT on commercial vehicles, providing they are used only for business purposes. Please note that you are subject to paying company car tax if you put your vehicle through the business.View all car deals
10. Simple process
If you need advice or assistance on leasing a vehicle, and finding the right car or van to meet your requirements, we offer the following straightforward steps:
a. Choose your car with assistance from a dedicated account manager
b. Get a quote
c. Apply for finance
d. Sign your contract
e. Decide on a delivery dateView top deals
Before you take out a lease
However, before you take out a lease contract, it’s important to consider that:-
- If you settle the contract early, you will be required to pay a termination fee
- If you exceed your agreed annual mileage allowance, you will be required to pay an excess mileage fee
- At the end of your contract, you will be required to pay for any damage to the vehicle, with the exception of fair wear and tear
Fleet UK is an independent specialist for car leasing and business leasing. Our customer service is exceptional, and our 5* customer reviews on Google are testament to the advice, service and value we provide.