easing a car is a much better option than buying a car, particularly if your needs are constantly changing, or you just cannot decide on which car you want to drive. There are vast numbers of the people in the UK leasing cars and changing them every six months. If you love cars, or you enjoy driving something new, this is an ideal option.
It is also an alternative to taking out an expensive auto loan to buy a new car for yourself. A lot of people do not and cannot accept this sort of liability.
Here is a new car, a new iPhone. We buy. We discard. We buy again. In recent years, we've been doing it faster.Arlie Russell Hochschild.
Buying a Car Will Be Cheaper in the Long-Term
Leasing gives you a lot of flexibility with your car. You are able to pick a variety of models, have them repaired with the help of the leasing agent, and you can change your car every few months. For a lot of people, this flexibility is a significant benefit. On the other hand, it will be more expensive than paying back an auto loan, and it will be more expensive in the long-term.
This is not necessarily a reason to avoid leasing cars. With the right financing in order, you can make it work for you.
How to Lease a Car in the UK
There is no shortage of registered agents in the UK ready to lease you a car. Many dealerships lease cars and sell them. See which dealerships offer these deals in your area.
The process of leasing a car is relatively simple. It works in the same way as leasing anything else. As long as you sign the contract and make the payments on time, you can drive the car as if it was your own. But you need to take care to inspect the terms and conditions before you lease any car.
Make sure you hone in on the area where it starts to talk about the consequences of accidents. Will the dealership pay for repairing the car or will you be expected to pay something towards it? Is it your car insurer who will cover the cost or will the dealership intervene with some sort of other agreement?
Another area you should look at is where you can take the car. You may need to purchase additional cover if you want to take the car overseas, assuming the dealership will allow it in the first place. Some leasing agreements will forbid taking your car abroad.
There is a surprising amount of variation between dealerships, so you need to take care to read the contract.
How Expensive Can a Lease Agreement Be?
Leasing a car can be as expensive as you want it to be. Most of the time, you can expect to pay a few hundred pounds every month. The more valuable the car, the more expensive the lease will be.
A lot of people use a leasing agreement so they can try out new cars before they buy them. And that is something else you have to take into account. You may well have the option to purchase the car after your lease ends. In some cases, the dealership will allow you to put the money you paid for the lease towards the eventual purchase of the full car.
At this stage, you are no longer going to be leasing the car you will be buying it, and therefore the agreement is going to change.
How Can You Finance the Purchase of a Car?
If you have already completed your lease and you wish to buy the car you were driving, the dealership itself may offer you favourable terms. They will treat it in the same way as if you walked into the dealership and asked to purchase a car. They may provide you with full financing due to the lease you once had, or they may ask you to put down a security deposit.
Take note that financing largely depends on your credit score. Your credit score will determine how reliable you are and how likely you are to be able to pay the money back. Financing the purchase of a car in this way is easy if you have a good credit history, but if you have had problems or no credit history at all, you could find it difficult.
Another option is to take out a personal loan from the banks. Again, this loan will depend on whether you have a good credit score or not.
It is important to bear in mind that a dealership will usually be able to process an auto loan faster. Car loans from banks tend to take weeks to process.
What Happens If You Fail to Make Your Payments On Time?
In the event that you fail to make your payments, either while leasing or buying, the dealership has the right to repossess your car. This is a type of secured loan, so the security is the asset you are purchasing. It works in the same way as a mortgage.
If you want some security, make sure you go with a lender known for being forgiving. Some lenders are notorious for ordering the repossession of assets without any negotiation within days of missing a repayment. As always, make sure you do your research.
Can You Manage the Agreement?
important to inspect your own finances before entering into any of these agreements. Ideally, you should have a household budget that will indicate exactly how much room you happen to have in your finances. This will give you an instant snapshot of the sort of car you can afford to lease or purchase.
Make sure you stress test your finances. You need to prepare for any unexpected changes to your financial situation. If someone loses his or her job, or utility bills go up next month, you need to know that you can continue to cover the payments.
Finally, whenever you lease a car or buy one, compare different dealerships so you know you’re getting the best deal. There are plenty of third-party websites that can help you to get this done.