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Car leasing: A Definitive Guide

Car leasing was somewhat unheard of in the UK while its popularity was soaring in the US, after some getting used to by UK drivers they started to see the benefits of leasing and it has slowly become one of the more popular routes to car ownership. We are living in a generation of ‘buy now and pay later’ so the leasing idea didn’t take long to catch on. People now use it as a reason to use a better and more up to date car for a fraction of the price than if you were too buy it out right.

Convenience – After your lease period you have two options; you can return the car to the leasing company, settle your account and walk away (pun intended), or you can renew your contract and keep the same car or upgrade to a newer one. There are also no hidden costs involved in renting a car; the prices are agreed upon and upfront so you don’t have to worry about the monthly payments changing, or incurring additional charges after the contract period has expired. As long as you follow the regulations set by the leasing company (mileage, wear and tear etc) and all payments are up to date there should be no surprise charges.

Savings – When buying a car you end up spending the whole of your budget and in most cases more, however, if you do decide to lease you only have to pay a percentage of the total cost at first and then regular monthly payments after that. This way you get to save the money you would have spent if you’d bought the car out right, you could then invest the money into other aspects of your life or business. This way you are able to manage your finances without the worry that you have invested in a product that will only depreciate the longer you have it.

Latest cars – You get to drive a car that would otherwise be out of your price range if you were to buy it outright. It is also a good idea for those people that can’t afford to buy a car. After paying the agreed upon down payment you only get to pay a small some monthly over an agreed upon time frame. Simply put a leasing option gives drivers the opportunity and freedom to upgrade their vehicles over a short period of time.

Depreciation – Leasing a vehicle means that one thing you do not have to worry about is the depreciation of the car. After your contract expires you can just drop off the car or renew your contract for a newer model. As opposed to owning the car out right, where when you want to sell the car you have to account for depreciation and ‘wear and tear’ and then subtract from the actual price of the car. This method offers flexibility and rest of mind to the leaser as the process involved in selling a car can also be a stressful one.

Low down payment
– Depending on the company, some might not require a down payment while others might. The ones that require an upfront payment will calculate it depending on the car you choose, the cost of depreciation and the length of your contract. These upfront payments are normally minimal in comparison to buying the car out right which means that the leasing option is more affordable to a wider range of people. The leasing companies that do not require an upfront payment will definitely require some sort of registration fee to cover the cost of maintenance, background checks and more.

Tax Deduction – If you need a car or a fleet of cars for business purposes then leasing might be the way to go. Business leasing is the easiest and most cost effective form of car leasing available today. This method is so popular that over half of all business cars in the UK are funded this way. The major reason for this is the fact that businesses are now entitled to certain tax deductions when they lease a car for business. At the end of the tax year some of the charges incurred can be offset against taxable charges.

Maintenance costs – Because the car is leased its maintenance is almost always covered by the manufacturer’s warranty, this means that if you have trouble with the exhaust or tires for example the cost for repair or replacements will be covered. It’s worth noting that the manufactures warranty only applies if there is a problem that you did not cause of the car dealer is out of business.

Check out Leden Leasing or call us on 01797 874 832 to talk to one of our experienced and friendly staff or to check out some of our exclusive Personal and Business Contract Hire deals.

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Posted on 3rd November 2016 at 6:33 PM

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