Choosing the right finance package for your car leaseIf you’re new to leasing, you probably have a lot of questions about the leasing process, how it all works, and what you’ll get out of it. You will find the answers to most of these questions below – if there’s anything you’re still unsure about, please give us a call on 0845 430 0234 to request further advice from the vehicle leasing specialists here at ABC Leasing.
What are the advantages of leasing?The UK leasing market has grown rapidly in recent years, with many people choosing to lease their vehicles instead of buying them outright. There are number of reasons why this is popular, not least of which is that it gives you the opportunity to drive a brand new car for a fraction of its value because you are only paying for the depreciation value, not its purchase price.
Here’s a simple example: if a car has a purchase value of £18,000 and you in 3 years’ time it will be estimated to be worth £12,000, then you only pay monthly rentals to cover the loss in depreciation over the 3 years i.e. £6,000.
Here are some of the key advantages of leasing rather than purchasing:
Leasing is more affordable
Purchasing a brand new car can be very expensive, and many people simply don’t have the funds to make this option viable. Leasing allows you to drive a brand new car without breaking the bank; leased cars are paid for in manageable monthly instalments, rather than a steep upfront fee, and since you’re only paying for the vehicle’s depreciation over time, the overall cost works out much cheaper than buying a car via a finance deal.
Added peace of mind
You may have considered saving money by purchasing a used car instead of a new model, but while this may seem like an appealing solution at first, it’s important to remember that used cars are far more likely to break down. Leasing a brand new car minimises your chances of breaking down, plus your vehicle will still be covered by the manufacturer’s warranty.
Get a brand new vehicle on a regular basis
When you reach the end of your lease, you’ll have the option to start again with another brand new vehicle! This means you’re never driving a car that’s more than a few years old, plus you’ll never have to worry about finding a buyer for your old vehicle.
Leasing Options ExplainedWe offer a number of different leasing packages here at ABC Leasing – here’s a quick explanation of the available options, along with the advantages and disadvantages of each:
Business Contract Hire
This option allows companies to lease a vehicle (or multiple vehicles) for a set period of time, usually ranging from 1 to 4 years. With a low upfront cost and fixed monthly payments, a business contract hire is a great solution for your company’s vehicle requirements. The lease company retains ownership of the vehicle(s) for the duration of the contract period.
- A good way to ensure that your company’s vehicles have all the latest technology
Personal Contract Hire
A personal contract hire works in much the same way as a business contract hire – it’s effectively the same deal, but for individuals rather than businesses. Again, the initial cost is relatively low and your monthly payments will remain fixed, so you will be able to drive a brand new car for a fraction of its purchase cost.
- Cost-effective way to drive a brand new car
- Get another new vehicle at the end of the contract period
This option works is similar to a contract hire in that you pay an agreed monthly instalment for use of the vehicle. However, at the end of the agreed hire period, you will have the option to purchase the vehicle at an agreed value, which is determined by the finance company prior to the contract period expiring.
- Allows you to put the leased vehicle(s) on your balance sheet
- Option to buy at the end of the lease period
- You take responsibility for the vehicle’s ongoing maintenance and operating risks. Interest fees vary between leasing companies
We can also organise an outright purchase of vehicles, often at great discounts because we purchase so many. If you are interested in this option then please call 0845 430 0234 to speak with one of our sales representatives.
- You own the car outright
- Not as affordable as leasing
What’s the best vehicle to lease?The car or van you choose to lease is very often a matter of personal preference – most current makes and models are available to lease, so you can usually pick whichever one you want. However, since the cost of your lease will be affected by the vehicle’s rate of depreciation, it’s a good idea to select a model that won’t lose its value too quickly. The following brands are known for manufacturing cars that depreciate slowly:
Understanding the terminologyLeasing for the first time can be a confusing experience, not least because of all the jargon used in this industry. Here are a couple of definitions that should help you to navigate the leasing process – if there’s anything else you’re unsure about, please feel free to call ABC Leasing on 0845 430 0234. Our friendly leasing experts will be more than happy to help!
DepreciationDepreciation means ‘loss of value’. The more an item depreciates, the less money it is worth at the end of the lease period. Different cars depreciate at different rates, and depreciation occurs especially quickly during a vehicle’s first year.
The main causes of depreciation are age (a car’s value depreciates as it gets older), condition (a car in poor condition is worth less than a car in perfect condition), and mileage (the more distance your car covers, the less it will be worth). So this means that your monthly payments will be based on the estimated car depreciation based on your chosen mileage allowance and the actual vehicle.
Residual ValueA car’s residual value will be estimated before your lease period begins. Simply put, residual value is equal to a car’s original value minus the value lost through depreciation (see above) over the course of the contract period.
The predicted residual value of your vehicle will determine how much you pay per month during the lease contract period.
Why choose ABC Leasing?If you’ve decided to lease instead of purchasing, we at ABC Leasing are the people to call. We have many years of experience, and our staff are extremely knowledgeable when it comes to the ins and outs of leasing a vehicle. We also have very close relationships with manufacturers, allowing us to offer our customers the best deals on the market.
Ready to lease your vehicle? Give ABC Leasing a call 0845 430 0234 or click here to enquire online.