5 Surprising Ways Leasing Saves You Money
Saving money is always a top priority, and now more than ever, people are looking for ways to stretch their budgets further in a post-Covid-19 world.
Flexibility is one of the major advantages of car leasing. This article highlights 5 ways that leasing can save you money. It further discusses the different types of car leasing.
Tips To Save Money When Leasing a Car
Consider no-deposit lease deals:
When starting a lease, you’re typically asked to commit to an initial rental, which can vary depending on your funder. Choosing the smallest initial rental can allow you to avoid a large outlay of money upfront. The amount of money you put down at the start of your term determines your monthly payment. So in other words he higher the down payment, the lower the monthly payment, and vice-versa. However, it’s essential to explore all options, as the difference between lower and higher initial rental amounts might not be as significant as you expect.
Add maintenance at the start of your lease:
Adding a maintenance package at the start of your term can help you save money in the long run and avoid unexpected and potentially significant bills. Your car maintenance package cost can be added to your monthly payments, which can alleviate some of the stress when your annual service or MOT is due. These packages typically cover scheduled services, MOTs, perishable items, and even tire replacements. This is an extra cost but will prove beneficial in the long term.
Save money with a car lease, by choosing an accurate but fair mileage:
It’s crucial to provide an accurate representation of the miles you plan to cover in your lease vehicle. To avoid mileage penalties at the end of your lease term, it’s crucial to choose an accurate annual mileage limit. Not accounting for enough miles could lead to penalties, which may be more significant than the cost difference between higher and lower mileage limits. The amount of miles you plan to cover in your lease vehicle determines your monthly payment, with higher mileage limits resulting in higher payments. Explore the different limits available, but make sure you don’t leave yourself short at the end of your term.
Consider in-stock vehicles:
Due to stock shortages worldwide following the Covid-19 pandemic, you can save time and money by considering vehicles that are in stock and ready to go. A global semiconductor chip shortage has resulted in some car parts being temporarily or permanently unavailable on new cars. By choosing an in-stock vehicle, you’ll avoid long delays and ensure that you get the best value for your next car lease without compromising on essential features or technology.
Search by budget:
By using a car search tool, you can browse all of the available lease deals based on your budget. To find the best value for your money, take some time to explore all the options available within your price range. If you have a specific car in mind, compare its specifications to the best options available in your budget. Don’t forget that many models come with a range of standard features, so you don’t have to spend more than necessary to get the features you want. You might even be able to save money by considering different manufacturers.
Types of Car Leases
Leasing, or long-term car rental, is a popular way to run a car. With personal contract hire, you pay a fixed monthly fee to use the vehicle for a specified period and within a certain mileage limit. The car is returned at the end of the agreement. This option is good for those who want to drive a new car every few years with fixed monthly bills and no commitment to buying the car outright.
Personal contract purchase (PCP) is almost the same as a lease, however, you will have to buy the vehicle at the end of the contract. You pay a deposit followed by a set number of low monthly payments. The minimum guaranteed future value (MGFV) is determined at the beginning of the contract. This is the amount that you must pay if you wish to own the car at the end of the lease. Another option is to exchange the vehicle for a new model or simply return it to the leasing company. This option is best for those who want to drive a more expensive car than they would buy outright and decide later whether to keep it or return it.
Hire purchase (HP) and conditional sale are simple ways to finance a new car. With HP, you pay a deposit followed by monthly payments. Once the agreement has been repaid in full, you take ownership of the car. The loan is secured against the car, which could make it easier to get finance at a reasonable interest rate. With the conditional sale, there are no added fees, so once you have paid your instalments in full, you take ownership of the car without any final balloon payment. These options are best for those who want to drive a car they couldn’t afford to buy outright and own once they’ve met all the payments. However, make sure to shop around and compare deals to get the best rate and avoid added fees.
In conclusion, leasing a car can be a great way to save money and gain flexibility in your transportation options. By considering options like no-deposit lease deals, adding maintenance at the start of your lease, choosing an accurate but fair mileage, considering in-stock vehicles, and searching by budget, you can find a lease that fits your needs and budget. Additionally, understanding the different types of car leases, such as personal contract hire, personal contract purchase, hire purchase, and conditional sale, can help you choose the best option for your situation. By doing your research and exploring all available options, you can save money while enjoying a new car.
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