The personal car leasing market is booming and is now becoming a popular choice amongst UK motorists.
However, a number of drivers who could benefit from leasing their car still opt to take out large loans to cover the cost of a new vehicle. In this article, we thought it would be useful to take a look at why you should consider leasing a car, instead of purchasing a new vehicle.
Benefits Associated with Personal Leasing
When it comes to purchasing a new vehicle, it’s always worth remembering that your new car will start to lose value as soon as you drive away in it. If you opt to take out a loan or a car finance agreement, you are paying a set amount per month for an object that is losing, rather than gaining, value. Basically, this means that if you choose to purchase your vehicle, it will continue to depreciate even as it sits on your drive.
Personal leasing offers a different option for drivers. Instead of outright owning your vehicle, you will pay a fixed amount to use your vehicle over a set period of time. This is generally between 2 and 4 years. Then, once your agreement is over, the car will then be taken back by the leasing company.
Let’s take a look at some of the main benefits of leasing a car:
- Your monthly repayments are generally less costly than a car loan repayment. Plus, some personal leasing options now require no deposit or a very small deposit.
- Drivers will be able to afford a vehicle that would otherwise be out of your price range.
- No need to worry about large up-front costs, car loans or capital outlay.
- The car manufacturer warranty will usually cover any maintenance costs, and road tax is also included in the lease.
- You can enjoy fixed-price motoring, as your monthly costs will remain the same for the duration of your car lease.
Main Car Finance Options
When it comes to leasing a car, motorists now have two common options, which include personal contract hire (PCH) and personal contract purchase (PCP). Personal contract hire gives drivers the ability to own a new car every few years, with low monthly payment options and no concerns over the vehicle’s resale value. Personal contact purchase works similarly, however, motorists are given the added option of buying their leased car in the future. When it comes to leasing a car, there are a number of rules and restrictions to be aware of, so it is important that you do your homework.
Credit Score Requirements
If you’re considering leasing a car, your credit score matters. If you have a good credit score, you will have more bargaining power. With a good score, you should be able to get a better rate on your lease agreement, as you will have demonstrated that you can manage your money effectively.
If you like the sound of leasing a brand-new vehicle, you can easily look online for personal leasing options. It can be quite useful to compare car leases online as all the information you need is at your fingertips. If you can’t find the answer to any of your questions, do some more research using a simple Google search or ring up the provider directly.
