Many people are still undecided when it comes to buying or leasing a car. Leasing became huge in the US before it eventually caught on here in the UK. It is essentially a long term vehicle rental, whereby you pay a fixed price monthly over a period of time.
Whilst the UK new car market thrives it seems that most of those opting for new cars are those without financial constraints. New cars also appeal to customers who are happy in the same vehicle for 60 months or those that the cost of depreciation doesn’t concern.
We understand it may seem like you are paying to fundamentally ‘rent’ a vehicle, whether it be a van or car, but there are many benefits in deciding to do it this way.
They say famously that as soon as you drive a new vehicle out of the showroom you instantly lose thousands on the value of that vehicle. And so, this is one reason why leasing is a very good option.
When you buy a new vehicle you are going to be tied into higher monthly repayments over a period of usually 60 months. Once you come to the end of your term, if you can resist shifting vehicles before then, then you will probably cover the interest paid over the 60 months with the vehicles final sale value. This doesn’t however prove good value for money when you work out how much you agreed to pay per month times 60 plus the initial deposit. The monthly repayments alone can be financially stressful.
With any business or personal car leasing option you can choose to pay no initial payment up front and instead increase your monthly payments so there is no need to pay a deposit. If you opt to lease a vehicle your monthly payments are going to be lower than what they would be if you were to make a straight purchase. This means you are likely to get a much better model or specification of model for your budget than what you initially anticipated.
A deposit on a new car could be anything from a couple of thousand pounds whereas at Hippo, you could be looking at anything from a no deposit lease to around £600 at the very most. The no deposit car leasing option is a fairly new phenomenon offered by very few dealers who know that customers struggle or dislike the thought of handing over lump sums for cars they are handing back.
If you opt to buy a new car then you are likely to have that vehicle for the next 5 years until your finance is completely cleared off. So, if you fancy a change during your finance agreement you are unlikely to get one as you will struggle to sell on your vehicle. Nowadays, a lot of emphasis is being put onto HPI checks and so car buyers are a lot wiser to people passing on their vehicles that still have outstanding finance as well as other common undisclosed car issues.
Car leasing also means you are able to swap your car every 2-3 years if you wish to do so however this does depend on your lease agreement terms, but swapping it is made easy and convenient by lease dealers.
Life can throw numerous hurdles and changes to you that you didn’t expect. A growing family, children leaving home or a job that requires the need for a spacious vehicle can all mean you need a flexible plan that allows for vehicle upgrades more frequently.
If you are somebody who has suffered from bad credit then don’t let this be a reason for you not to lease a vehicle. Lenders are now more aware that people up and down the UK are keen to rebuild their credit and therefore want to help customers with bad credit car leasing.