Car buying can be an extremely exciting time, as you get to drive around numerous dealerships and try out a variety of different cars until you find the one that feels right and is great to drive.
However, it can also be a time that’s annoying and to a certain extent, upsetting, as you struggle to find a car that fits your individual circumstances – and budget – whether you like the actual model or not. And yes, there is always the opportunity to buy the car on a finance agreement, but even this can mean that you have to settle for a car that you don’t actually want but have to get because it is cost effective and meets most of your needs.
However, whilst there isn’t a great deal you can do about car prices – even once you’ve haggled with the salesperson to reduce the price it can still be more than what you were looking to pay – there is something that you can do in terms of the way that you buy the car and it’s something that has become extremely popular in the last 12 months. Car leasing was once the choice followed mostly by large businesses but was used by nearly 60% of all car buyers when they took car finance from dealers in the first half of 2010.
It appealed to businesses because it allowed them to supply cars to their employees without actually paying the full price for them. The way that car leasing works is simple and in it’s most basic form is just a case of a person or business leasing a car off a leasing company, paying them a monthly fee for doing so and handing the car once the lease agreement has finished. Some agreements (such as PCP) allow people the option to buy the car at the end of the contract if they want. In effect it is just one, long type of car hire. It’s been the perfect solution for getting company cars for years, as it means that the business doesn’t have to pay out for the entire cost of the car, which can often be a substantial amount if there are several employees who require vehicles.
So how does this benefit an individual car buyer who can’t afford to buy a car outright or on finance?
Car leasing has become particularly popular amongst non-company car buyers in recent years and gives them exactly the same privileges as if they were a business, allowing them to lease a car for a predetermined length of time. The reason that it can be of benefit to people who can’t afford cars by other means is that as you don’t actually own the car, you don’t have to pay for its full value, meaning that if you were to buy a Volkswagen Golf Hatchback using a loan or hire purchase you could end up paying around 496 pounds a month over four years or on a car leasing agreement it would cost 264 pounds a month.
And if you want to actually buy the car?
Simple – the most common lease agreement known as PCP allows you to pay a set amount of money once the lease has finished which will act as a final sale payment, meaning the car will be completely yours. Car leasing may not be something that you’ve looked into in any great depth in the past, but if you’re considering buying a car and can’t afford to do so outright with cash, it’s strongly recommended that you have a look at the many benefits of leasing.