Nobody likes unexpected bills, especially if you have a growing family to think about. But when you own a car you have to prepare for all sorts of expenses like servicing, maintenance and repair costs which can spiral into thousands of pounds and for some reason they always seem to come up at the worst possible time.
This is one of the reasons many people look to leasing, or Personal Contract Hire (PCH) as it’s also known, as an alternative because it allows you to lease a car for an agreed period of time at a fixed monthly cost which means you can more effectively budget your monthly expenses.
If you’re considering buying your new car on finance, make sure you visit our finance section for a quote – we work with over 21 lenders to give our customers access to over 100 different lending options.
If you’re considering leasing then Parkers is on hand to help, in this guide we’ve outlined the key benefits and important information to consider.
What are the benefits?
Leasing isn’t for everyone, some people prefer to take ownership of a car while others are not keen on the idea of being tied into a financial contract for three or four years.
There are many benefits for picking leasing though, possibly the biggest is the one mentioned above, the fact that you can plan your finances much easier with one fixed monthly payment for the car, no unexpected bills to plan for.
Quite a few leasing contracts also include maintenance and servicing as part of the cost and some even offer insurance too.
Another big benefit to leasing is the fact you will be driving a new car, one that you may not have been able to afford to buy otherwise and with a new car comes the latest technology, safety kit and economical engines. This means it should cost you less at the pumps too, dependent, of course, on which car you go for.
Leasing contracts are usually set up for two to five years and some require a higher first initial payment, although in most cases this is lower than the deposit required for other finance schemes.
The price of your lease will vary dependent on the amount of miles you travel each year and the length of time you want to run the car for. The fewer the miles and the longer the term the lower the monthly payment. VED car tax is also included in the cost so that is one less bill to worry about.
Because you don’t own the car at the end of the contract leasing is almost always cheaper than finance schemes like PCP.
There is also the added benefit that you do not need to worry about selling the car at the end of the lease or risk losing money if you cannot sell it for the price you want, depreciation is worked into your monthly lease.
Benefits – at a glance
- Access to a brand new car you may not have otherwise been able to afford
- Fixed monthly payments that could include maintenance and servicing too
- No risk of unexpected vehicle depreciation.
Potential drawbacks
One of the biggest downsides to leasing, depending on which side of the fence you sit, is the fact that you never own the car, you pay a significant amount of money during the duration of the lease but with no asset or anything to show for it at the end.
As the car doesn’t belong to you, leasing companies will also have guidelines on how you use the car, the most common being the amount of miles you travel and the condition of the car when it is returned.
Go over these mileage restrictions and the penalties can be quite substantial, plus although most leasing companies will work to fair wear and tear guidelines, if any damage is done inside or out be ready to foot the bill too.
Drawbacks at a glance
- You never own the car
- Mileage restrictions
- You are tied into a contract
Compare the latest deals with Parkers
So if you’ve decided that leasing is for you, you’ll probably want to shop around to find out what deals are out there.
That’s where Parkers comes in, we have gathered some of the best leasing deals for you to search for and compare in our leasing section.
There are over 250,000 deals on our site at the moment – check out our dedicated section today here.
Want to know more?
Car Finance – what are your options? – click here
When is the best time to buy a car – click here
Car Insurance: all you need to know – click here
