17 benefits of car leasing
If you’ve never leased a car before, you might be wondering what all the fuss is about. Why borrow a car when you can buy one?
But the fact of the matter is, leasing is becoming more popular year-by-year, and over 90% of new cars are financed. The UK has the third biggest leasing market in the world, only coming in behind China and North America.
The industry is set to keep growing as more drivers look to reap the benefits of car leasing. And as more competition surfaces, it benefits you more as dealers have to keep prices competitive to get more customers.
Cheap deals, that’s a good start, right? Let’s explore some of the other benefits of car leasing:
1. You get options
There are three lease contracts available when you choose to lease a car, so you’ll always get an arrangement that suits you. You can choose personal contract hire, which is where you hand the car back; personal contract purchase, which is where you can hand the car back or buy it; or hire purchase, where you buy the car over the contract period (although the last two aren’t technically a lease).
2. Leasing is flexible
As well as having options with lease types, you can alter your mileage, lease duration and deposit amount to suit your needs. Most companies have an unlimited mileage option if you drive a lot, and some companies will offer you the ability to avoid paying a deposit altogether.
3. Get deals even if you have financial problems
Some brokers work with specialist lenders that can get car lease deals for people that have IVAs, CCJs, bad credit or even bankruptcy. Be wary of any companies that tell you you’ll be accepted whatever your circumstances, this isn’t true and is misleading information.
Everyone’s acceptance depends on various circumstances, such as credit history, loan amount and financial background. Everyone’s circumstances are different, and all lenders account for this.
Further reading: How to get a car lease with bad credit
4. Get a new or nearly new car
Newer cars are available to you with minimal risk. New cars are expensive to buy; they’re also a costly commitment and a risk. Will the vehicle have any major repair issues? How will you sell it? Do you have the money to pay for it?
Leasing lowers this risk by giving customers 1-5 years with a car, which minimises the risk of any repair damage and covers them if the car does need repairs (new cars are always in the manufacturer’s warranty for 3-4 years).
5. Payments are lower
As well as giving you access to newer cars, leasing also takes down the cost of driving the car. As you’re only paying for depreciation and not ownership, the monthly payments are automatically lower. So you get a brilliant car and a low monthly payment, what’s not to love about that?
6. Drive a car you wouldn’t usually drive
The combination of low payments, new cars and short term agreements mean people can drive cars they wouldn’t usually be able to drive. Driving a better car is something that’s appealing to most drivers, and leasing makes it achievable.
7. Switch cars every few years
Most people say they love leasing because of the flexibility it offers them. Getting a new car every few years gives you the opportunity to drive something completely different. The variety offered is limitless, and you can drive whatever you like.
Get a BMW 6 series for three years and then a Ford Ranger for a year. No problem! The electric car market is starting to grow now, which is exciting as more environmentally-friendly cars hit the market.
8. Avoid a deposit
Paying a deposit is always advised as it will take your monthly payments down, but it isn’t always possible to do so. Most people don’t have £1000+ lying around to stump up for a deposit, so the option of adding a little extra onto their monthly payment to avoid paying a deposit is worth exploring.
9. Makes budgeting simple
It doesn’t matter whether you’re an individual or business leaser, your monthly payments will never fluctuate, and they’ll always come out on the same day of the month. You know you’ll never have any problems with your payments (unless you don’t pay them!).
10. Road tax included
Some lease agreements include road tax. As you don’t own the vehicle, you aren’t liable to pay the tax, like if you drive a company vehicle. Check with your leasing company to determine how your tax will be paid.
11. Avoid MOT expenses
If you get a new car, you won’t have to pay for an MOT as they’re exempt for three years, saving you more money.
12. Maintenance options
Get a maintenance contract bolted on to your lease agreement if you want to avoid any servicing charges. You’ll also be covered for wear and tear, so you’re less likely to incur any charges when you hand the vehicle over.
Further reading: Who pays for maintenance on a lease car and is it worth it?
13. Improve business cash flow
Cars and vans are a huge expense for businesses, so it can disrupt your cash flow and affect your ability to get credit elsewhere if you have tens of thousands coming out of your account. A fixed monthly payment keeps your cash flow healthy and also allows you to plan and budget more effectively.
14. Go green
There is more pressure for businesses to be green now, and customers want to see businesses taking a step in the right direction. Electric cars and vans are expensive to buy, but leasing one could be a lot cheaper, saving you money and making you look good in the process.
15. Business leasing is even cheaper than personal leasing
Remember when we said personal leasing is cheap? Well, business leasing is even less expensive because of the VAT breaks available. If your car is for business and personal you can still claim the VAT back. If you can prove it’s 100% for business, you can claim 100% of your VAT back. You can even claim on your maintenance package.
Further reading: What’s the difference between business and personal leasing?
16. Business discounts
Suppose you’re leasing more than once vehicle you could be eligible for some discount. In that case, most companies will notice that you’re making a large investment and that any fleets or numerous vehicle leases will be their biggest contracts.
Further reading: 6 benefits of leasing a vehicle through a business
17. The process is easy
Leasing a car is simple, all you have to do is:
- Search for a vehicle or use our free soft credit check tool to see if you’re preapproved for car finance (no impact on your credit score).
- Liaise with your account manager, who’ll go through the application with you.
- Once we arrange your finance, you can pick your car up from our Blackburn showroom, or we can arrange nationwide delivery.