You're on the motorway and a Ferrari goes flying past you in the outside lane. You wish you had one of those but unfortunately you can't afford to buy one with your own money and it will take far too long to save up for one. What are your options if you can't wait that long to be driving around a brand new Porsche or Lotus?
One alternative is entering into a hire purchase agreement, or another option is to get a personal loan. However these options are notoriously expensive and in addition you may not be in a position to borrow any more money. If you are in this position then car leasing may be for you.
A car leasing agreement is usually very straightforward. You enter a into a contract of 2-4 years in length, paying an initial payment of up to 3 months worth of payments and a set monthly amount thereafter without ever actually owning the car. The initial payment you make with car leasing is never as large as the deposit you would need to put down if you bought a car outright. When the lease period expires you can extend the agreement or give back the keys.
Usually the only other thing that the dealer will ask of you is to provide an expected yearly mileage. Lower mileages will lead to lower monthly payments but it is important to try and be fairly accurate with this as going over this mileage will lead to penalties when the lease period has expired.
The fact that you don't have to pay a massive deposit has already been mentioned and is one of the major advantages of car leasing. There are also other benefits. You can for example get hold of a car easily and quickly with much lower monthly repayments than with a hire purchase agreement with a high interest rate.
Another benefit is that car leasing will usually include the cost of servicing, a major worry for most motorists. Also it is a good way of enabling you to change your car regularly, which is a great advantage for those of us who like to have access to the most up to date cars. Car leasing is also such a simple arrangement and people like the fact that if they are able to give the keys back and walk away at the end of the agreement without having to worry about trying to sell the car on for example. So if you don't want to get an expensive loan to buy a new car, car leasing could be a great alternative.
One alternative is entering into a hire purchase agreement, or another option is to get a personal loan. However these options are notoriously expensive and in addition you may not be in a position to borrow any more money. If you are in this position then car leasing may be for you.
A car leasing agreement is usually very straightforward. You enter a into a contract of 2-4 years in length, paying an initial payment of up to 3 months worth of payments and a set monthly amount thereafter without ever actually owning the car. The initial payment you make with car leasing is never as large as the deposit you would need to put down if you bought a car outright. When the lease period expires you can extend the agreement or give back the keys.
Usually the only other thing that the dealer will ask of you is to provide an expected yearly mileage. Lower mileages will lead to lower monthly payments but it is important to try and be fairly accurate with this as going over this mileage will lead to penalties when the lease period has expired.
The fact that you don't have to pay a massive deposit has already been mentioned and is one of the major advantages of car leasing. There are also other benefits. You can for example get hold of a car easily and quickly with much lower monthly repayments than with a hire purchase agreement with a high interest rate.
Another benefit is that car leasing will usually include the cost of servicing, a major worry for most motorists. Also it is a good way of enabling you to change your car regularly, which is a great advantage for those of us who like to have access to the most up to date cars. Car leasing is also such a simple arrangement and people like the fact that if they are able to give the keys back and walk away at the end of the agreement without having to worry about trying to sell the car on for example. So if you don't want to get an expensive loan to buy a new car, car leasing could be a great alternative.
About the Author:
If you want to learn more about car leasing, the Car Leasing UK website at www.carleasinguk.com is a good place to start.
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