One of the biggest decisions you will have to make in your life is whether you want to buy a vehicle or go for vehicle leasing in UK.
Both these options come with their own advantages and disadvantages and the right choice will vary from person to person. Not everyone will prefer leasing and not everyone will be able to afford buying a new car. How do you decide which option is best for you?
Car leasing advantages
1. When you lease a car you will only be paying for effective depreciation on a vehicle instead of paying for the total depreciation like you would have had to if you bought the car. Let me give you an example, let’s say you lease a car worth 10000 pounds and the value of that car would have reduced to 8000 pounds in 2 years. That means you will only have to pay 2000 pounds over the two year period which is a lot lower than 10000 pounds.
2. Another option with leasing is that you can even choose to buy the vehicle at the end of the lease period if you want to. This means you can weigh your options towards the end of the leasing period and make a decision based on your situation at the time. And since you were the one driving the car, the leasing company will most probably give you a better deal than anyone else when it comes to buying the car.
3. In most car leasing contracts, any damage or repairs are usually covered by the leasing company itself. This will let you save a lot of money in terms of maintenance which you would have had to pay if you owned the car. Some leasing companies may only pay a part of the repairs and maintenance of your vehicle, but that still saves you some money at the end of the day doesn’t it?
4. Leasing a car is also the perfect way for you to improve your credit rating. All you need to do is make sure you to pay your monthly repayments on time and you will not only save money but also see your credit rating improve alongside.
Car leasing disadvantages
1. If you decide to cancel a leasing contract before expiry of its term, you will have to pay a lot of money as far as fees and penalties are concerned. This will work out to a lot more than if you had bought the car in the first place. Even if you end up losing your license because of repeated traffic offences, the leasing company can terminate the lease and impose heavy fines on you.
2. There is a maximum mileage clause in every leasing agreement. If you exceed this mileage, you will have to pay for every extra mile you have driven. This isn’t very economical and therefore you should ensure to check this figure before signing any documentation.
3. The cost of insuring a leased car usually is much higher than the cost of insuring a car you have purchased.
4. Lastly, when you lease a car, whatever you pay the leasing company is a sort of rent and nothing actually goes towards your purchase of the vehicle. If you want to buy the car at the end of the term, you will have to pay the full value of the car at that time.
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