*Collaborative guest post*
Unsurprisingly, car leasing is continuing to grow in the UK and worldwide, with drivers ditching the responsibilities of ownership in favour of a stress-free driving experience. Leasing removes the considerable upfront payment, maintenance costs, and the distressing inevitability of depreciation and instead lets the driver take the wheel of a brand new car for a low monthly payment. At the end of the contract, the car is simply handed back to the leasing company with the option to pick up another brand new vehicle.
As with all agreements, it’s a good idea to make sure you know exactly what you’re doing before you sign on the dotted line. Making mistakes when finalising your agreement can be costly long-term, so make sure to always consider the following before you drive your new car away.
Figure out a realistic estimation of your annual mileage
When researching cars to lease, make sure to check the annual mileage that each deal includes. The cheapest deals will often be so cheap because they come with a low annual mileage – some as little as 5,000 miles – so it’s important to know exactly what the deal includes.
Signing up for a low mileage agreement and then exceeding that limit can be costly, and you may end up owing a considerable amount of money at the end of the contract.
Think carefully and fully about the amount of driving you are likely to do so that you have a realistic figure in mind when looking for deals and, if you know that you will drive more than the limit allows, then simply ask for a higher limit. Many companies are happy to work out a personalised deal, so it’s always worth asking.
Keep your car in good nick
When you eventually return your car at the end of the lease period, you will be able to get away with anything that is considered ‘normal wear’, but any damage that goes beyond that could land you with additional unexpected fees to pay.
What is defined as ‘normal wear’ can vary, so be careful when reading through your leasing agreement to note what is expected of you as a driver. You will usually be required to keep the car maintained by reputable garages at the recommended service intervals.
Do consider gap insurance
As is the case with any new car, as soon as it is driven off the forecourt your lease car’s value will significantly decrease.
In the unlikely and unfortunate event that your lease car is either stolen or written off, the payment that your insurance company makes for the value of the car may not cover the total cost of the remainder of the leasing agreement. In this case, you may have to pay the costs yourself unless you have gap insurance.
Gap insurance is used to cover the difference between the insurance company’s payout (or the market value of a car) and the amount originally paid for it. This removes the risk of your insurer not paying out enough money to cover the rest of the lease deal.
When taking out any car lease, be sure to ask whether the contract includes specialist gap insurance and, if it doesn’t, you may want to find it yourself.
This piece was put together by the creative team over at Vantage Leasing, a UK based car leasing company. If you are considering a car leasing deal, then contact Vantage Leasing for a transparent leasing option on both personal and business leasing contracts.