How much does it cost to lease a car?
When it comes to car leasing, everyone wants to get the best possible deal. Read on to discover what can affect the price of your lease and see how you can cut costs.
What Affects The Price Of My Car Lease?
Below are a number of important factors to be aware of that can increase car lease prices.
1. Car depreciation
Unlike many finance options, which requires you to pay the full cost of the car’s valuation, leasing deals are based on the current and predicted value of the car at the end of the contract.
Due to depreciation, most cars you buy today reduce dramatically in value over the years. But thanks to leasing, this isn’t your problem, as you simply return the vehicle once the contract is complete.
2. Initial Rental
At the start of the arrangement you will be given an option about the size of the initial payment you want to provide. The available choices typically amount to the same as 3-12 months of payments.
The more you are able to pay, the lower your monthly instalment costs will be for the duration of the contract. Some deals are available with as little as one month up front – ask your Account Manager for more details.
Most car leasing contracts last between 2-4 years. Government legislation states that cars have to undergo an MOT every year after they turn three years old.
But if you take out a maintenance package, you don't have to worry about MOTs, servicing or routine repairs for the duration of your contract.
A maintenance package will increase your monthly payments overall, but ensures you won’t face any expensive, surprise repairs later.
It’s also worth remembering a new lease car will be under the manufacturer’s warranty, so any faults that don’t appear as a result of excessive wear and tear or negligence will be free to repair.
4. Wear and tear
When you lease a car, it is expected a certain level of wear and tear will become evident on the car over time. The vehicle is not expected to be returned in brand-new condition. This will be mentioned in the contract you sign at the beginning.
When the car is returned it should be in as reasonable a condition as possible. If there is excessive damage to the car, you may be asked to pay for any repair work carried out. If you’re not sure what’s classed as excessive, see the BVRLA Fair Wear and Tear guide.
Similarly, your lease contract will also state the maximum number of miles the car can be driven each year. If you have exceeded the agreed mileage limit when you return the car, you’ll be charged for every extra mile on the clock.
It’s best to be accurate when choosing your mileage, however, with Leasing Options, it could cost as little as 5p for every additional mile.
If you’re worried at all about going over your mileage allowance, please don’t hesitate to get in touch and we can help you figure out the next steps you can take.
Fully comprehensive insurance cover is the only type of insurance accepted by the finance companies we use. This should cover you if anything bad happens to the car. You must also tell the insurers that the funder is the registered owner of the car and the cover should begin from the day it is delivered, until it is returned.
If you want to add comprehensive cover to your monthly payments, we offer insured leasing, which also includes breakdown cover, maintenance, repairs and accident management.
Another type of cover recommended is Guaranteed Asset Protection (GAP) insurance. This will increase your payments, but covers the costs of your car being stolen or written off, so could be cheaper if you face an unfortunate incident.
Here at Leasing Options, we include the cost of VAT on all of our cars, so you don’t need to worry about this when payment is required.