7 Reasons Why You Should Lease a Car
Both individual drivers and businesses consider leasing their vehicles to be a better option than buying. Leasing or Personal Contract Hire (PCH) has become increasingly popular due to a wide array of practical and cost-effective reasons. Check out the top reasons why you too should lease a new vehicle and don’t miss the tips on doing it in a smart way.
It requires less money upfront
First of all, leasing is more practical simply because it’s more affordable. Some lease offers only require a low down payment, others may even require virtually ZERO down payments.
When you are leasing, you are only covering the depreciation of the vehicle and this also means the monthly payments on a brand new auto lease will be lower.
Here’s the first tip: Keep in mind that low monthly and zero down lease offers might be accompanied by higher monthly payments. So if you want to minimize monthly lease payments, you should consider paying a higher down payment.
You can get a new auto lease even with a bad credit rating
Not all people are fortunate enough to make ends meet without the usual sacrifices. This includes having a low or bad credit score. It will be hard to apply for a new car loan if your credit rating is less than stellar.
Fortunately, you can still lease a car even with bad credit which is a great option for all those who do not have the possibility of getting such a loan.
You don’t have to think about maintenance costs
Brand new cars immediately lose much of their value with the first drive after being bought.
New vehicles are accompanied by a manufacturer’s warranty. If something goes wrong with a lease car, simply bring it back to the dealership and the warranty will take care of the rest. Most lease offers last about 1 to 3 years, which is within the prescribed warranty period of the carmaker.
Here’s another hint: choose your lease term in such a way that it lasts as long as the original warranty of the vehicle.
Nicer car for less cash
Is your budget only enough for a barebones econobox? You can drive a better and nicer vehicle for about the same budget. If you add lower monthly payments and low down payments to the picture, you’ve got yourself a winner. With leasing, you can drive away in a nicer car without straining your budget.
New vehicle every 3 or 4 years
Leasing will also allow you to drive a new car every 3 or 4 years. Signing a new contract before the lease expires means you simply bring back the old vehicle and drive away in a brand new one while still enjoying ZERO maintenance costs.
You can get tax benefits
If you lease a car as a business, you can claim back 50% of your VAT on lease payments. You can even claim back 100% of the VAT on particular maintenance agreements. This means you can have your cake and eat it, too.
Here’s one more tip: if you want to reclaim VAT on your leased car, you should definitely consider taking a maintenance agreement, particularly if the lease contract is more than 3 years.
You don’t have to think about the trade-in value of the vehicle
Some people end up buying a Lexus instead of a Jaguar because of the trade-in value or resale value. But if you end up leasing a Jag, you don’t need to worry about any of those. When the lease expires, simply drive to the dealership and hand over the keys.