12 Important Things To Look For When Leasing A Car
In the 21st century everything feels more attainable, and car leasing is a big part of that. Car lease deals offer you flexibility, accessibility and control; three things we increasingly demand as a consumer, and three reasons why car leasing is becoming more and more popular.
A car lease deal allows you to pay for a car whilst you need it, and then return it or change it for another vehicle with no increased hassle. You can also benefit from warranties and lower repair costs, affordable monthly payments, manageable deposits and down payments and no ongoing obligations in addition to your regular payments. Of course, there are considerations to be aware of to make sure you get a great car or van lease deal.
- Type of lease agreement
A Personal Contract Hire (PCH) is often the preferred lease option. It offers relatively low monthly payments, you can drive a new car every few years and have no concerns about the car’s future value.
For a standard PCH car leasing deal you undergo a routine credit check and have to pay around three months’ lease upfront. You never own the vehicle, and at the end of the lease you return it, offering owners the ideal flexibility.
All lease agreements are different but the finer detail usually includes mileage caps and you may also be unable to modify the car, such as adding a spoiler or a tow-bar. There may also be terms preventing you driving the car abroad, or at least not without first seeking permission from your finance company.
3. Business or Personal Lease?
If you run a business you may find it more cost effective choosing a business lease deal over a personal lease deal. This is, of course, all dependant on your individual circumstances but it may be that you need a new car for work purposes above personal needs so choosing a business lease could be a good option.
4. Interest Rates
Unfortunately, car lease deals are not impervious to interest rates, but these are often negotiable and take into account both the Adjusted Capitalised Cost and the Residual Value, so effectively you are paying interest for the use of the car and the money loaned to you to use it. The interest rate is sometimes known as a Finance Charge or a Rent Charge.
5. Payment Options
Like anything, research is key when attempting to find the best car lease deal, and just like when buying a car outright, there are plenty of options for how you can finance it to suit your individual circumstances. This can be difficult if you have a bad credit rating, and the bigger down payment you can make or the lower mileage cap you can agree, the lower your monthly payments will be.
6. Care and Maintenance
Given that you don’t own the vehicle, it can be tempting to ignore this, but we certainly don’t recommend it. You are normally liable for cosmetic damage and wear and tear charges, so you should ensure you know exactly what you are responsible for.
You might find you can’t keep up with your payments, but finance companies can be sympathetic as long as you are upfront about it. If you have paid (or have the means to pay) half the value of the car, you have the right to return it. However, your finance company might offer to extend the lease period, and therefore reduce your monthly payments, or you could negotiate another arrangement.
8. Consider Your Future Needs
There might be a particular car you've had your eye on that would be a perfect car for now, but will that car still be right in a few years' time? Try and think ahead of what your life might be like and if you plan to start a family, in which case the car that's right now might not be big enough in years to come.
9. Terminating a Lease Early
This can be costly so you should check your options. Your contract will include fees and conditions and sometimes an agreement will allow you to transfer the lease, and the car, to someone else, but you need to check this.
10. Finding a Car That Holds Its Value
It is true that every car depreciates in value the moment you drive off the forecourt in it, but some more than others. Scan the car market and choose your lease car wisely. Depreciation is a big factor and affects your monthly payments, so discuss this with your finance company and be open to compromise in what suits you style-wise and finance-wise.
What is included in your coverage? This will help establish what you are personally responsible for and you may want to look at extended warranty options also.
12. Total Costs
Always check what you will be paying over the full length of the lease term. This needs to be cost effective and shouldn’t overshadow the glamour or prestige of what you want to be seen driving around in. At the end of the day, getting the best car lease deal is important, so be sure to do your research and take a look at our range of market-leading special offers.