The Secrets to Car Leasing in the UK
By: Marge Dubois | Posted: 25th July 2007
The Secrets to Car Leasing in the UK
Car Leasing is on the rise in the UK. It is being seen more and more as a viable, tax efficient and cheaper way of getting into a vehicle than car loans. One of the most common questions is "Why should I consider leasing my car instead of buying it outright?" When people ask this question, they actually mean "why should I lease my car rather than use a traditional loan to buy it?". This is because very few people will actually pay cash for their car; they will usually pay a deposit and borrow the remainder from either the bank or a finance company. The key comparison then is "lease versus buy" and the answer to this varies on whether you are a private individual or a businesses.
Although most people intend to keep their car for the full term of the lease there can be occasions when they wish to terminate it early. For example; if the car has been stolen or written off in an accident. Alternatively you may just decide that you wish to change your car before the end of the lease.
The good news is that all leasing companies will allow you to terminate your lease early. However, a car lease is effectively a fixed term finance agreement which means that is designed to run for a given period of time. Commonly this is either 2, 3 or 4 years.
One of the key advantages of leasing a car is that you can add a variety of services to your contract. The most common one that can be added is a maintenance package. If you are doing more than 15,000 miles a year it can be a benefit to include maintenance within your lease.
If the car turns out to be worth less than the estimated value even though the car has done the correct number of miles and the lease has ended on the contract end date, then the leasing company absorbs this loss and not you - this is one of the major benefits of leasing over buying.
Leasing companies will always quote an "excess mileage charge" when they provide you with a quotation. This is a pence per mile (PPM) figure and is charged for each mile over the contracted number of miles.
Go here: Car Leasing for further information.
Marge Dubois reveals the secrets of car leasing in the UK. Click here for your FREE guide - Leasing Vs. Buying
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Tags: period of time, mileage, remainder, quotation, finance company, car loans, pence, traditional loan, leasing a car, private individual, leasing companies, leasing company, car lease, finance agreement