When you’re exploring the market for a new vehicle, you are faced with many decisions, but have you ever considered leasing for a fixed period instead of buying? Leasing used to be fairly unheard of in the UK, despite its popularity in the US, where one in four cars are owned through personal leasing. Of course, there are pros and cons to both options, but if you’re looking to use a vehicle for a certain amount of time, you may want to think about leasing. We’ve put together some points to consider about leasing and why you should give it a go.
It is only for a fixed amount of time
If you’re someone that would like to drive a different vehicle every few years, leasing will allow you to do that. At the end of the term, you can return the vehicle and walk away, or opt to take out another vehicle on a fresh agreement. Each term is usually around three years, but this can be negotiated with the leasing company.
It can be very cost effective
It isn’t always cheaper for people to lease vehicles, but on some lease packages, it is. Many include maintenance and breakdown cover, which is a lot easier on savings. If you lease a van, the company should fix it, meaning the cost doesn’t come out of your pocket. Plus, the monthly cost for any leased vehicle will be fixed, so you won’t have to fork out a large amount of cash or take out a loan, as the monthly payments are usually very affordable.
If you grow attached, you may able to purchase
Some leasing companies offer you the chance to buy the vehicle at the end of your fixed term, so if you find that you’ve been enjoying the vehicle a lot, you can simply opt to buy it from them. Be aware that this may not be an option with that company you’ve chosen to lease from.
If you own a business, it can be claimed as a tax deduction
The cost of renting or leasing an asset is deductible as a business expense, so this can reduce your overall tax bill. Business only pay tax if they are making a profit, so if your business is making a loss, minimising the impact of buying a new vehicle is likely to be more of a priority to you then borrowing money tax efficiently, making leasing a more suitable option.
Of course, the whole question around whether to lease or to buy totally depends on your financial situation. Many people do prefer to buy a vehicle outright because then it is theirs, whereas leasing is basically just renting. However, many people do claim to find it cheaper than buying, and they find that they have more freedom when it comes to changing their vehicle at the end of its term. If hassle free, low monthly payments, the opportunity to drive a new vehicle every year, and maintenance cover sounds like something you’d love, you should definitely consider leasing.