10/08/2021
Leasing a car in the UK has grown in popularity in recent years because most of those drivers find that car leasing is a simple and cost-effective way to drive a new vehicle.
However, leasing is not for everyone and here the Tilsun Leasing team take a look at the pros and cons of leasing a car to help you decide whether you will be wasting your money.
Leasing a car, or personal contract hire, works in a similar way to a long-term rental.
When you want to lease a car, you simply choose the make and model of the vehicle you want and then pay an initial payment.
This initial fee will consist of the initial rental of one, three, six or nine months of the monthly payment.
You could opt to pay one month but your monthly payments will then be higher, or you could pay nine months and enjoy lower monthly payments instead.
The amount you pay is also determined by the make and model of the car you want to lease, how long you want the lease to run for - 24 months, 36 months or 48 months - and the annual mileage.
How many miles you travel every year is a crucial part of personal contract hire because it has a direct effect on the car's value when you hand it back when your agreement ends.
Essentially, when you lease a car, you are paying for its depreciation and if you travel more miles, the depreciation will be higher.
When leasing a car from Tilsun Leasing, there's a choice of annual mileage limits ranging from 5,000 miles a year, to 30,000 miles.
Most people will be racking up 8,000, 10,000 or 12,000 miles commuting to work and travelling to see friends and family.
We have explained in other car leasing articles why it is important that you estimate the annual amount correctly because you will face an excess mileage charge if you go over your agreed limit
As mentioned, once your agreement ends, the car leasing company will send someone to look over the car for any damage and to make sure that the mileage limit has not been exceeded, and they will take it away.
That's it, there's no surprise payment to pay and you can then lease another brand-new car.
That's not the case when you buy a car outright.
If you don't want to lease your next new car, then buying is a more complex undertaking.
You can pay for a car using:
It's also important to appreciate that when you look at the monthly payments for the routes to buying a car listed here, leasing usually offers the lowest amount.
As mentioned in the previous section, the ownership of the car is a straightforward issue to understand and it's an important one too.
If you're thinking of leasing a car in the UK, there are some pros to understand, including:
Having looked at the pros and cons of leasing a car in the UK, there are pros and cons of buying too. The pros include:
Here, we have taken a closer look at the question of whether leasing a car is a waste of money, and the answer is, 'it depends'.
A lot depends on your personal circumstances and whether you have the cash to pay outright for the car.
If not, then leasing makes sense since you need a low deposit, and the monthly payments are reasonable.
The obvious downside is that you never get to own the car and you are effectively renting it from the car leasing company.
If you have any questions about leasing a car, then contact the team at Tilsun Leasing on 03330 040 888 who will be happy to answer any questions.
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