Over the last few years, car leasing (also known as Personal Contract Hire) has become increasingly popular in the UK. Many cite that younger people favouring to pay for things on a monthly basis for this increase in demand, however, with the buyer’s change cycle also becoming much shorter, a large number of people are seeing the benefits of leasing a car instead of purchasing one outright. In this article we outline 4 of the main advantages of car leasing:
Lower upfront cost
Investing in a brand new car typically requires a 10-20% deposit, meaning the initial payment will set new owners back more than they would like to admit. With a lease however, you can drive away for as little as one monthly rental payment. Personal Contract Hire is great for a range of financial circumstances, particularly for people that have just started a new job and are receiving a steady income, but don’t yet have a large deposit to buy a new car outright.
Cheaper to maintain
Research by Kwikfit found that on average the cost to drive for motorists is £162 per month (or almost £2,000 per year) before they take into account the cost of the car. However, since lease cars typically have the first 3 years of repairs covered under the contract, getting repairs on your lease car is easier and you can avoid a large maintenance expense.
Get the car of your choice
Being able to drive the car of your choice is a luxury that the majority of motorists can’t afford – especially when it’s one of the most popular new cars out there. With Personal Contract Hire, you can drive a brand-new vehicle every few years, and take advantage of the recent increase in technological developments like newer safety features, improvements to in-car entertainment, and greater fuel efficiencies – a development that’s especially important right now.
Don’t worry about depreciation
Depreciation sees most cars decrease in value between 15-35% within their first year, and a whopping 50% or more over three years. Knowing it’s likely that you’ll be getting far less than you paid in the future when you come to sell your car isn’t great, but with leasing, you can just swap it out for a new vehicle. When you lease a car, the residual value is how much it’s worth once you come to the end of the agreement. Your monthly payments also take into consideration the RRP of the vehicle, mileage, predicted loss in value, and condition over the length of the contract – meaning you don’t have to let depreciation ever cross your mind.
Car leasing can provide hassle-free motoring. With an option to include a full maintenance package that saves you any large expenses, the chance to avoid the depreciation risks associated with traditional ownership, and getting to drive the newest and greatest vehicles, there truly are many benefits to Personal Contract Hire instead of buying a car outright.