Picture the scene: your car has stopped working or simply no longer meets your needs, leading you to contemplate buying a new car. However, have you thought about possibly leasing your next car instead – a process also referred to as personal contract hire or PCH?
This measure would entail agreeing to pay a car manufacturer or finance company a fixed monthly price over a set period in order to keep using a particular car. At the end of the lease period, you would hand back the car. So, what major benefits could you get from this arrangement?
The choice of car models can be much better
If you’re looking for a new car right now, you probably want one noticeably better than the one you already have. Nonetheless, your finances could throw something of a spanner into the works there.
When you limit yourself strictly to car-buying options, your budget might only stretch to essentially a newer version of what you already have. However, as car-leasing companies have access to top-drawer deals from major dealerships, looking into leasing could enable you to choose from a wider range of cars. For example, if you want an electric car, you could pursue Tesla lease deals.
Improved reliability, features and technology are within reach
When you lease a car rather than buy one, worries about your vehicle potentially breaking down at inopportune times can be a thing of the past. This is because, in leasing a car, you will be able to get hold of an all-new model that, naturally, is likely to be more reliable than a pre-owned one.
Getting a brand new car would also enable you to benefit from especially modern features and tech during your automobile journeys. So, a leased car can – compared to a bought one – prove more effective at things like synchronising with your smartphone and helping to prevent crashes.
You can avoid putting too many financial eggs in one basket
When you hit the road with a new car, its value will drop by 15-30%, says the Retail Motor Industry Federation – and, a year after you buy this car, it could end up with 40% less of its original value.
It’s hardly a wonder that the petrol-industrialist businessman J Paul Getty once advised: “If it appreciates, buy it. If it depreciates, lease it.” It’s a philosophy worth applying to getting your hands on a new car, enabling you to do so without committing too much of your hard-earned money to it.
Unexpected costs are also easier to avoid
When you sign up for a car-leasing deal, you can have a better idea of how your motoring costs will shape up over the next few years – as those expenses will all be accounted for in the deal.
Hence, you won’t have to fret about setting aside extra money for, say, a Road Fund licence and breakdown cover – and you could add a maintenance package to the deal, too. This would help you to avoid having to replace the likes of timing belts and air-con units during the lease period.