There are plenty of articles around giving you a run-down of the pros and cons of leasing a car, and they’re perfect advice if you’re new to the whole leasing idea, but we’ve decided to give some fresh insight into just how you can save money by leasing your next car instead of buying one, and how much less stressful it can be.
So if you’ve read a bit about car leasing you’ll know how it works – that over a pre-decided set term of 2-4 years you pay a monthly amount which covers the depreciation of the vehicle. Along with that there is an initial payment which is a multiple of that monthly amount, normally 6 or 9 months.
Then at the end when the contract finishes you simply hand the car back and either start a new leasing contract or walk away. Most car leasing companies will aim to keep the process as straight forward as possible and often it takes as little as 2 weeks to receive your new lease car, so the whole process becomes simple and easy from the outset.
Let’s look firstly at how leasing compares with buying to give you a little context. Say you were looking to get a Mercedes-Benz E Class AMG Line Diesel Saloon and the brochure price is £34,440. WhatCar? quotes average depreciation as 20% per year so let’s use that as an example figure, which means owning that car will have cost you £13,760 after 2 years.
If you lease the car you’ll normally pay an initial payment which is a multiple of the monthly amount, so for this Mercedes it would be £2,752.74 including VAT which equates to 9 months.
The monthly rental will be £305.86 over a period of 23 months which equals £7034.78, so in total over the whole leasing term you’ll pay £9787.52 plus a £200 arrangement fee making a grand total of £9987.52, which also includes Road Tax and no need for an MOT as the car is new.
What also comes as a handy extra to add on to your leasing package is what’s known as Maintenance. This is another fantastic way to save a lot of money on your car through leasing and it is completely stress-free too. Included within most maintenance packages are things like roadside assistance, a 24/7 helpline, servicing costs, like-for-like tyre replacement and a large number of networked garages on hand, all for around £20 a month on top of your lease cost, which for a period of 2 years totals an extra £480.
If you think about what a normal service would cost (about £180) which is yearly, and what one branded tyre such as Pirelli would cost to replace (about £120 each) and you need 4, then you’re already looking at double the amount of your maintenance package.
What is purely an added bonus to leasing is what happens at the end of your contract term. You have two options – either hand the car back and simply walk away or you can take up a new leasing contract with a new car. So the process is easily less hassle than if you owned the car because you would have to sell it, which wouldn’t necessarily leave you with enough money to buy a new one again.
Obviously, leasing a car isn’t for everyone and there are important lifestyle aspects to factor in before deciding to lease. Always keep an eye on car depreciation levels and some makes of car will depreciate a whole lot faster than others, such as your gas guzzlers. Fuel consumption and efficiency are two factors which affect the depreciation of a car, so these must be considered before you choose a car to lease.
Also, the mileage you agree to in your lease contract must be realistic, as if you go over this mileage some leasing companies will charge high rates per mile, and the more mileage your car has done the higher its depreciation will be and subsequently you will pay higher monthly premiums.
As well as that, look into applying a couple of options onto your car when you order it, which might sound a bit silly because you’re going to give the car back but it could help maintain the residual value of the car over your leasing term. Metallic paint is a fairly easy option to go with, or something you know will maintain the residual value of the car for the years to come, as this will ultimately mean that you’ll pay less per month to lease it.
So as with anything you need to do your research before you decide on your car and how you want to have it, but we think using the tips we’ve shared above that you can save a lot of time, money and stress by leasing your car or van. For more information about the leasing process or to view some of the cars available to lease, visit www.allcarleasing.co.uk*.
*All Car Leasing are an accredited member of the British Vehicle Rental & Leasing Association and pride themselves on their 5* Feefo Independent Customer Service rating as well as their excellent value leasing deals. Being a member of the Eurocar Group means they have access to a wide network of professionals and regular exclusive offers on a wide range of vehicles to ensure customers receive the best deals.