Although business vehicle leasing has been popular for decades, there is a lot of confusion with the general public as to the real benefits of personal car leasing. Many people assume that it is not attractive for them as they will not actually own the car - and in a country where we love to be able to call things our own, this can be a particular stumbling block in the process.
However, more and more people have been taking up car leasing in recent years (the Finance and Leasing Association recently reported that UK dealers sold more cars in the first half of 2010 using leasing than traditional car finance). The following 2 points show just why it can be an attractive option for you.
1. Vehicle leasing makes expensive cars much more affordable - one of primary selling points for people looking into leasing a car for the first time is that it can allow you to get a car much cheaper (based on a monthly payment) than it is to finance a car through a loan or hire purchase.
This is largely due to the fact that as you don't own the car, and you're driving it and only likely to keep it for 3 to 5 years and the finance company will sell the vehicle at the end of the lease contract for a residual value that it calculated when you entered in to the agreement. Therefore, you are effectively paying the finance company for the amount that the car depreciates across that term instead of paying to own the car. They will of course add interest on top but this explains why 'high end' vehicles such as an Audi are so cheap to lease because they depreciate slowly meaning that you will pay a lower amount to the finance company than a car that depreciates quickly.
2. VAT and maintenance costs are kept to a minimum - whenever you see company executives driving around, they're generally doing so in a vehicle that is between 2 - 4 years old and nearly all of these are likely to be financed with business car leasing. There are two primary reasons for this. Firstly, with business car leasing companies avoid at least 50% and sometimes 100% on VAT. Another reason for this is the vehicles are typically less than 3 years old and under warranty and often have a maintenance contract. Consequently, maintenance costs are kept to a minimum.
Whilst the VAT reduction is only relevant for business car leasing, personal car leasing has the same maintenance and warranty benefits.
Therefore, car leasing can be beneficial for businesses and individuals and whilst it is much cheaper to lease a car (based on monthly payments) the biggest hurdle in making a decision will be overcoming the desire to own the car.
This information sheet describes the negative impacts of smoking and the benefits of quitting. Stopping smoking is one of the best things a person can do to improve their health, finances and general ...
Car Leasing - 5 Biggest Mistakes People Make Leasing is a great option if you're looking for a new car. However before you sign up to a deal, you should read the following. These common tricks are used by some leasing companies to make deals appear more attractive: 1) Be careful of enhanced deposits The most common trick to make monthly payments appear lower is to enhance the deposit (initial payment). The deposit should be roughly 3 x the monthly payment. 2) Beware of the length of the lease Most car leases last for either 24 or 36 months - this is ideal (for vans, 48 months is also common). Another very popular trick to make monthly payments appear lower is to increase the length of a lease to 48 or 60 months. Take a Look at: Car Leasing UK This will of course bring down your monthly payments as you are financing the car for a longer period. Warning: Your warranty is unlikely to be valid after 36 months. Therefore we advise you not to lease a car for longer than 36 months - as you will be responsible if something goes wrong. In addition, the longer you have the car, the more susceptible you are to wear and tear charges. 3) Be wary of 'unlimited mileage' deals 'Unlimited Mileage' deals are essentially Finance Lease and unlike other types of finance, there is no direct excess mileage charge. This does not mean that the mileage is 'unlimited' though as there is a residual balloon figure (owed at the end of the contract) which is based on a set mileage. If you have been sold an 'unlimited mileage' lease and you do more than the mileage stated on the contract, you can pretty much guarantee that the vehicle will not be worth the balloon figure at the end of the lease, so you'll end up having to pay for the shortfall. Finance Lease is also risky in today's economy - as it's hard to predict what a vehicle will be worth at the end of the contract. Take a Look at: Lease Cars 4) Compare quotes on a like for like basis Some leasing companies aren't always clear what they are quoting for. This coupled with the fact that manufacturers make so many different models can cause confusion. Ensure you get a written quote with the full description of the vehicle. This will help you compare quotes on a like for like basis - And ensure you go ahead with the right deal. 5) Use a company accredited by the BVRLA and with office premises The leasing industry is fiercely competitive. Hence why some leasing companies adopt the above bad tactics. Take a Look at: Car Leasing The BVRLA (British Vehicle Rental & Leasing Association) seeks to raise standards of operation and service within the leasing industry. Members have to adhere to their strict Code of Conduct.