There are many ways to obtain a new car: you can walk into the nearest showroom and hand over a wad of cash, or if you are really desperate, you could hotwire a nice sporty little number for a temporary ride. But if buying a new car is not an option (and hopefully stealing one is also not an option!), leasing a vehicle might be just the ticket, so what are the pros and cons of leasing a car and is it a viable solution?
Leasing a car is very different to buying a car on hire purchase or via a loan: at the end of the specified agreement, unless you make a special arrangement, the car will not belong to you. Because of this, leasing cars is a very common way for businesses to obtain a fleet of cars for their employees. They can continually have access to new cars and never be stuck with 4seohunt.com old cars worth very little. But what are the pros and cons of leasing a car and can it work for you?
What are the pros of leasing a car?
1. Leasing a car means instead of driving an old banger for years, you can enjoy driving a brand new car for a couple of years, and then change it for another brand new car—this gives you access to all the latest models and makes you the envy of your friends.
2. Contract leasing arrangements are based on a fixed monthly payment with no extras, which makes it much easier to budget your finances.
3. Unlike many hire purchase finance deals, you do not have to put down a large cash deposit when you lease a car. You will also not be expected to pay a lump sum at the end of the agreement in order to buy the car.
4. Leasing arrangements normally cover all of the maintenance costs associated with running a car, so aside from the cost of insurance to drive the car, you need never worry about the prospect of expensive repair bills or road tax.
5. Cars depreciate from the moment you drive them away from the showroom, but if you lease rather than buy, new car depreciation is not a problem and you are never going to end up in negative equity whereby your car loan is greater than the value of the car.
What are the cons of leasing a car?
1. You never actually own the car if you opt for a car leasing agreement, so despite paying money out year in and year out, you will never have anything to show for the expense.
2. Leased cars are subject to a mileage allowance. This is something that is agreed at the outset of the leasing arrangement and would normally depend on the type of lease you go for, but if you exceed your agreed mileage during the term of the lease, expect to pay a significant penalty for the privilege.
3. In the long term, leasing a car is an expensive option and for some models of car (those that do not depreciate quickly), buying is a more sensible idea.
4. If for whatever reason you need to terminate the car lease agreement early, you may have to pay a fee, so read the small print of the agreement carefully before you sign on the dotted line.