A Review of the Financial and Other Advantages of Leasing
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At a time when many of us are naturally looking to reduce our overhead and outgoings, getting on the road for an affordable cost becomes even more important. For years, U.S. and UK drivers have had a choice between traditional finance and buying a vehicle outright for cash. In truth, both approaches have their pluses and downsides.
The good news is that car leasing offers a third approach that can provide flexibility, freedom and financial fairness. Let’s take a look at why more and more drivers are turning to it.
Smaller Deposits and Monthly Payments
Buying a car outright can seriously eat into your savings and leave you exposed or stretched if you suddenly find that you have to repair the car or fix something at home. Granted, you won’t have monthly payments to make, but you will have less flexibility when it comes to your overall finances.
Traditional finance, where you pay a bit off each month and then own the vehicle at the end of it, used to be positioned as the solution to this problem. While it keeps some of your savings, you still generally have to put down a deposit. Leased cars nearly always come with smaller deposits and smaller monthly payments. It’s Ideal when you want your budget to go further.
Predictable Monthly Payments
Fixing the monthly payments makes everything more predictable, and we’re not just talking about the cost of the vehicle each month. Many leasing agreements in the UK allow you to roll in the road tax, a maintenance plan and breakdown coverage into the deal. This is great if you want to be able to pay a single amount each month so that almost all of the costs associated with your vehicle are evenly distributed throughout the year.
Freedom to Drive the Latest Models
Options like this new Tesla Model Y lease are an example of what one can get with a lease–a high-caliber vehicle at a reasonable monthly rate. Many leasing companies pride themselves on focusing on higher-end, safer and more environmentally friendly vehicles that come with the latest powertrain technology. The result can be an addition to your life that is cheaper to run and that will protect you and your family.
Flexibility to Personalize Agreements
Personalizing a lease agreement is easy when you go to one of the UK’s leasing experts. You can adjust the amount you pay each month, the length of the agreement and even ask for clauses that allow you to swap to a newer model before the end of the term. It could be perfect if you want to be able to maintain complete control over your transportation, so that you never have to compromise.
Tax-deductible Breaks for Businesses
If leasing a vehicle for business purposes, in the UK you may be able to claim back the VAT on the monthly payments and reduce the cost further. Leasing can represent a smart way for businesses of all shapes and sizes to scale quickly. Add in the fact that you have access to the latest models, and with leasing you will be able to keep a growing fleet on the road more easily than using other financial approaches.
No Getting Stuck in Resale Traps
Last but by no means least, we need to talk about depreciation. The price of property generally trends upwards if you wait long enough, but the same is certainly not true when it comes to vehicles. In just two-three years, the typical car will lose more than 50% of its value. The problem with this is that once you’ve paid it off in full, you’re then left with a low-value asset that you may have to try to sell to fund part of your next vehicle purchase.
Leasing solves this problem by setting up the agreement so that you never own the car. You simply rent it from the leasing company and then hand it back with nothing to pay once the agreement ends. It can be a smart solution for those who want to pick out another brand-new car starting with a clean slate.
Conclusion
Leasing a vehicle in the U.S. and UK is an increasingly popular way to get on the road,. It often can be done for less than the price of the more traditional approaches. The beauty of this is that it allows you to drive newer, safer models without sacrificing a large part of your savings or getting stuck with a low-value asset at the end of the agreement.
The post Why Leasing Is Changing the Way We Drive first appeared on Clean Fleet Report.