When most people think of a leased car, they imagine a corporate or commercial vehicle intended only for business use. However, this doesn’t have to be the case and personal car leasing is in fact becoming increasingly popular in the UK. For many people, this allows them to be able to drive cars that would normally be out of their price range in a responsible way.
How Does It Work?
Leasing provides a straightforward approach to driving a car. You’ll pay a monthly fee to the lender just like you would with a rental. However, rather than being able to drive the car over the course of a few weeks, leasing specialists like Car4Leasing generally operate over a twelve-to-forty-eight month period. The amount you pay each month will be a fixed-rate sum, that’s largely dependent on your annual mileage limit and the make and model of your desired vehicle. While the monthly fee set out by the lender will remain the same, be aware that any rise in VAT during the course of your agreement will also affect you.
What Are the Benefits?
In addition to being able to choose from a large variety of vehicles including some futuristic and performance cars, there are several other benefits leasing provides over buying. The monthly installments that you pay will typically be lower than that of a comparable personal loan, and you won’t have to worry about costs of ownership like depreciation. Vehicle Excise Duty is included for the duration of the agreement and many service providers can also offer packages that include maintenance fees and breakdown cover too.
Is There a Catch?
As with anything in life, leasing isn’t perfect. It’s important to remember that you’ll never actually own the vehicle, even at the end of your agreement. Be sure to choose a reasonable annual mileage limit–the average in the UK is 7,900 miles–as exceeding this will result in a penalty per mile. When returning the vehicle, you’ll also be at the mercy of your fair and wear tear agreement. This refers to the kind of damage a lender is willing to accept as fair use during the course of your contract. While small scratches are to be expected, any marks that require further cosmetic work could result in serious additional fees.
For most people, driving their dream car remains a fantasy. If you take the time to budget your finances accordingly, however, it could become a reality.