Many people assume that leasing a car requires less research than buying one. However, the best way to compare it is to imagine buying a house versus leasing a house. You would still research everything about the house you want to lease, and leasing a car is no different. At Alexander Powell, we have put together a few tips that you should consider when leasing your next car, to ensure you get the best deal.
What Is Car Leasing?
Think of car leasing as a long-term rental. You will make an initial down payment and then have fixed monthly payments over a certain period of time. Technically, you are renting the car, so when the agreed period ends, you will return the car and the contract ends. This is an ideal situation for people who wish to change their car regularly, as you can start a new contract, with a new car, as soon as your initial one ends.
Pros & Cons
There are obviously some downsides to this approach. In the long run, you’re paying out money for something that you will never own. However, there are many positives to this situation. Firstly, you can update your car regularly, Second, there are no extra costs involved since you know how much you will be paying over the agreed term. But a major upside is that as the car loses value, your contract remains the same. A car can lose up to 20% of its value in a year, but this matters not if you are leasing the car.
Aim For The Cheapest Monthly Payments
Since you will be paying a fixed amount per month, there are a few areas where you can negotiate to get the best deal. Work out your average monthly mileage, and choose a limit that best covers you. If your limit is too high, you’ll end up paying more unnecessarily. Also, consider how much you can afford to give in your initial payment. The higher this payment is, the cheaper your monthly payments will be. Also, consider how long you will make your contract for. Longer contracts will mean lower payments.
Include GAP Insurance Into Your Budget
Guaranteed Asset Protection is optional insurance that covers you in the event of theft or accident. You may get this included in your contract, or it may be something you need to arrange with a separate insurance company. Either way, it can be a wise investment and may save you a lot of money in the long run.
Consider a Maintenance Package
Wear and tear is something that will occur over time. If you are planning a short-term lease, it might not be something you need to consider. However, if you are planning a longer lease, it makes sense to get a maintenance package. As with any extras, make sure you are aware of what this package will cover. It is hard to predict everything, but be aware that theft, accidents, and even MOT tests, are all potential headaches waiting to happen.
Be Happy With Your Contract
No matter what your final agreement is, make sure you are happy with your contract. Shop around as if you are buying a car, negotiate well, and this will hopefully help you find the best deal for your car lease.