What should I consider when approaching the end of my lease agreement?
About six months before the end of your contract, you should take some time to reflect on the past few years with your car. There are some things that you should be looking at, including;
- Whether the car is right for you
- Whether leasing is right for you
- Your options at the end of your contract
And it’s these things that we will be looking at in more detail in this article.
Is your car right for you?
You’ve had your car for a few years and you’ve got to know it and how it works, but has it been right for you? Reflecting on whether your current car is right for you is one of the first things you should consider at the end of your lease contract. Consider the following;
Is it the right type of car for your needs?
If you have a coupe, has it been big enough? Do you perhaps need something bigger, such as an Estate or an SUV?
Or, if you have a larger car, are you looking to get something smaller and more economical? If you have moved from the countryside to the city then you might be looking for something that is small and easy to park.
Think about the boot size and the head height, and also if your situation has changed or will be changing. If you have a growing family then you might want to invest in something bigger. Likewise, if the kids have grown up and have cars of their own, you might want to consider something a bit smaller (and dare we say it, a bit sportier?).
Are you happy with the running costs?
If you are unhappy with how much your current car has been costing you in fuel, then you will want to look at something more economical next time. Perhaps you want to make the move into the hybrid or plug-in hybrid market to really lower the cost.
You should also look at how much you have had to pay in servicing. Of course, when you lease a car you have to get it serviced, but has it left you out of pocket? If it has, then you might want to consider getting a maintenance agreement on your next car.
What is a maintenance agreement?
A maintenance agreement is an additional cost on top of your monthly payments that cover all servicing for the duration of your lease contract. I have seen maintenance agreements that cost as little as £10 a month.
This essentially means that when the time comes for you to service your car, the cost is already covered and you won’t have to pay out for it in one go. It’s perfect for those who want to stagger their servicing costs.
Are you happy with your monthly payments?
Have you been happy with how much you have been paying monthly for your car?If you think your monthly payments have been perfect, then that’s great news, you know what sort of price range to look for in your next vehicle.
However, you might have increased your disposable income in the few years you’ve had your car, and therefore want to splash out next time around and get something more luxurious. Alternatively, you might have decided you don’t want to spend as much money on a car so are going to look for something a bit more affordable.
It is always important to go with a price that you feel comfortable with. You are going to be making those payments for a few years, and if you aren’t comfortable with the amount then you could end up running into trouble, or simply not being happy.
What do you want to do when your lease contract ends?
When your lease contract ends, you have three options;
- Hand the car back
- Buy it via a third party
- Extend your lease contract
If you really love your car, then you might not want to part with it yet or simply don’t want to part with it at all. There may be a chance that you can buy your vehicle or possibly extend your lease contract. However, this is not always possible. If you do want to extend your lease contract or buy your car then we suggest you discuss this with the finance house well in advance of your contract ending. You can read more about your options when your lease contract ends here.
So those are some of the things you should consider when reflecting on your time with your car.
Is leasing right for you?
Another question that you have to ask yourself is whether leasing is really right for you.
If you have felt comfortable leasing, and you have felt comfortable with having a mileage allowance (and the excess mileage fee) as well as keeping it in good condition, then this is great news. This means that you can then simply look for another lease car.
However, if you have decided that you do in fact want to own your car at the end (with no complications) or you don’t want any mileage or condition restrictions, then leasing might not be the right option for you after all.[vc_single_image image=”60709″ img_size=”article-image”]
What other finance options are there?
Instead, we will point you in the direction of a finance option. There are a few options available to you if you don’t want to lease.
A Hire Purchase is a purchase agreement in which you still pay monthly payments, but at the end of the contract you own the car with nothing more to pay. There are also no mileage and condition restrictions on a Hire Purchase car. You can read more about Hire Purchase here or you can watch our video below.Alternatively, you might want to look at a Personal Contract Purchase. This is slightly more flexible in case you aren’t quite sure what you want to do at the end. It works the same way as a Personal Contract Hire, but at the end, you have three options;
- Hand the car back with nothing more to pay
- Subject to mileage and condition restrictions
- Part-exchange the car
- Buy the car for a pre-agreed value
You can read more about Personal Contract Purchase here, or watch our video below. Now you’ve considered what you like and dislike about your car, and whether you are going to continue to lease your car, it’s time to think about the next vehicle.
What is your next vehicle going to be?
So, we’ve looked at what you like and dislike about your current car, whether you are happy with your monthly payments and whether you want to stick to a lease contract or look at something different.
Now, you’re ready to look at getting yourself a new vehicle.You might already have a vehicle in mind, or you could be starting at square one. If you have a vehicle in mind, then it’s time to do some research in terms of pricing. We advise having a look online and seeing what is on offer, then once you have a rough idea of how much it is going to cost, ring an independent vehicle broker. They will be able to then source quotes for you and present you with a few options. This is better than ringing multiple companies and getting quotes yourself, as you will then end up talking to multiple people and this can sometimes be overwhelming and confusing. Instead, if you talk to an independent broker, they do all the hard work for you and you are only talking to one person at a time.
If you have no idea where to start, then we recommend going on a few websites with car search engines. This way you can fill out as much as you like of the criteria, and then you will be presented with options. You can then do more research on the cars you like the look of. We recommend reading and watching our reviews as well as asking friends and family. After you have narrowed it down, you can talk to a broker who will be able to gather some prices for you. You can read more about what to look for in a vehicle broker here.
How long should I wait before ordering a new car?
We recommend that you start considering your options six months before your current contract is coming to an end.
It takes a person roughly 3 months to make a decision on what car they want, and then you also have the documents and delivery process which can also take a few months. Therefore, six months gives you plenty of time to consider what your next steps will be and order a new car if necessary.
The earlier you do this, the less stressful it will be. The last thing you want is to be without a vehicle, be it for a few weeks or even a few months. The earlier you plan for the end of your contract the less stressed you will be when the time comes for your current car to be collected. In conclusion, there are a few things that you should consider as you are approaching the end of your lease contract. These include how happy you are with the vehicle itself, the cost of the car and whether leasing is right for you. It is advisable that you think about these things six months in advance of your contract ending, this gives you plenty of time to decide what is best for you and your situation. A car is a big decision, and you don’t want it to be rushed. Hopefully, this has given you some idea of what you should be reflecting on before your lease contract comes to an end.