Getting started with your first car lease
Car leasing has become incredibly popular in recent years, mainly because of the excellent deals available. Essentially, rather than spending many thousands of pounds all at once on a new vehicle, leasing instead offers the opportunity to drive the latest models by paying a cheaper, monthly fee. If you're considering the prospect of your first vehicle leasing, there are a number of things to take into account, ensuring you're able to save money and get the best possible price. Take a look at the following tips from Autograph and lease your next car with confidence.
Looking to lease your next car? Follow these tips:
Think about your budget
Whether you're buying or leasing, one of your major considerations will be the budget. You don't want to spend more than what's affordable as you'll be making payments for between two and four years, depending on the length of your contract. Your monthly payments will, in fact, be cheaper by leasing your next vehicle, rather than buying outright too. Why? Because when leasing you'll simply be paying the depreciation rate, which is the amount of value the vehicle loses over time.
Remember, it's not just the initial cost to consider and other factors to bear in mind are insurance, road tax and MOTs. With many of the newer vehicles available to lease there's no road tax to pay, instantly saving you cash each year.
Decide on your contract
With vehicle leasing you'll have two main contracts to choose between, with one of the significant differences between them is what happens to the car at the end of the agreement.
- Personal Contract Hire: Personal Contract Hire agreements are becoming more and more popular, as a viable alternative to buying your next vehicle. Otherwise known as car leasing, Personal Contract Hire allows you to ‘rent’ a vehicle for a pre-agreed period of time. At the end of the contract, you simply hand the vehicle back. What’s more, with Personal Contract Hire you’ll have the opportunity to customise the contract to meet your needs. Not only can you select any vehicle you wish, but decide on a length of time the contract will run for and how many miles you’ll be allowed to travel annually. Of course, the price you pay for your Personal Contract Hire will also be reflective on the model you choose. For instance, a smaller city car wouldn’t set you back as much as a larger saloon on top end sports vehicles.
- Business Contract Hire: Business Contract Hire is a funding method suitable for business entities registered for VAT – up to 100% of VAT can be reclaimed, provided there is no element of personal use. If there is an element of personal use, then only 50% of the VAT is reclaimable. Vehicles are hired for an agreed period of time, usually between 12 and 60 months. A rental is paid based on a pre-agreed mileage. Business Contract Hire agreements can include the full maintenance of the vehicle including all consumable items such as tyres and brakes. Your road tax will also be included as part of the deal. At the end of the contract, the vehicle is simply returned to ourselves, so alleviating any disposal issues or depreciation risks. Up to 100% of rentals can be offset against taxable profits, subject to some revenue limitations.
Remember your insurance costs
Many motorists forget that when leasing a vehicle, they'll still need to arrange adequate insurance. This can be paid for in the same manner as an owned vehicle, so when choosing your lease car, pick something with suitable insurance costs. As always, with insurance, it's best to compare the market and get the best deal available. In fact, by simply comparing several insurers you'll be able to save hundreds of pounds annually.
Consider your mileage
When arranging your first vehicle leasing contract you'll need to think carefully about the mileage. In fact, it's the agreed mileage that'll mostly affect the price you pay on a monthly basis. Where possible you should calculate accurately the number of miles you'll run up on a yearly basis, before adding some extra just in case of exceeding this. Most lease contracts are priced online at 10,000 or 12,000 miles, but for those commuting daily to work, it's not uncommon for them to exceed 15,000 miles each year. The problem is, there are often fines for exceeding the agreed mileage. So it pays to ensure setting the right number before signing the dotted line. Remember, leasing is still cost effective, no matter if you have to pay a bit more because of your large mileage needs.
Just because you're leasing rather than buying outright, doesn't mean you should avoid thinking practically about the vehicle you really need. For instance, it's common for people leasing to opt for something pricier and in the luxury range. However, remember you need to keep making payments, so ensure you've a backup plan if your finances become worse and there's money in the bank to help continue paying the lease agreement. Your credit history will be checked too, so if you've a bad rating your application may be rejected. Therefore, if you know you've had a shaky financial history it'd be worth choosing a smaller, more affordable vehicle.
What type of car should you choose?
Technological advancements in the automotive world now mean it's possible to have a vehicle that's eco-friendly and will save you money on those all expensive petrol or diesel bills. Therefore, one of your considerations should be checking out the projected mpg. Alternatives to traditional petrol or diesel vehicles are the hybrid and electric variants. These are much cheaper to run, tax and insure; therefore, if you're looking to cut back on your expenses they're the ideal solution.
Check out our lease deals
Every now and then we throw some special deals into the mix for a limited period of time. Why not take a look today and find out what you can get your hands on? The deals available have normally been knocked back price wise, so you could be able to pick up a bargain. You can find our special deals available here. For more information on car leasing or to arrange your own leasing deal today, simply get in touch with the team at Autograph Leasing. We're available on 01634 687070.
Keywords: Car Leasing Advice