How to get the best car lease deal
So you’ve decided you want to lease a car, hooray! Now, you just have to try and find the best deal.
There are lots of different factors involved when trying to find your perfect car and many lease deals are time sensitive. Therefore, finding a deal that works best for both you and your timeline can prove to be difficult. Understandably, you might be wondering;
- How do I get the best lease deal?
- How do I know I am getting a good deal on my lease car?
We understand that the process of leasing a car can sometimes be daunting and potentially overwhelming. That’s why we decided to provide you with some key tips to help you find the best car lease deal.
1. Choose the right car
No matter how great the deal is, the car has to be right for your needs. A lot of customers think that to get a good deal they have to choose specific cars that are ‘on a deal’. But actually, there are limitless amounts of deals to be had, the thing that should be at the forefront of your mind is what cars are right for you.
Is leasing more expensive if the car is more expensive?
A lot of people think that the more expensive the car, the more expensive the lease, but actually that’s not necessarily true.
Prestige cars such as Mercedes have a much better residual value and so are worth more at the end of the contract, so they tend to have better leasing costs because they hold their value.
It’s all about how much the finance house can sell it for after you’ve finished with it.
If you take a Ford Mondeo and a Mercedes E-class, 9 times out of 10 the Mercedes will be cheaper to lease.
In our collective experience, there doesn’t seem to be much of a link between the retail price and the lease price other than the resale value. It really comes down to timing of the deals.
However, the more expensive the car, the more expensive the insurance. You should always get an insurance quote before you decide on your car, otherwise a brilliant deal could turn into a very expensive headache.
2. Does credit rating affect a lease deal?
If you have a terrible credit rating, it’s likely that you will be rejected for any sort of finance. However, if you just have a CCJ from a couple of years ago, or your credit rating is low but not terrible, you may still be able to get a lease.
Each funder will have different requirements, and each broker has access to different funders. Therefore you will have more chance of getting a lease deal with a broker with access to multiple funders because they can pick the funders that will be more likely to accept your circumstances.
However, you’re not going to get the premium pricing.
[vc_column width=”1/3″][vc_single_image image=”43353″ img_size=”article-image”]From a finance house point of view, you haven’t got a proven track record of paying on time, so you’re a higher risk. They’re going to want their money as quickly as possible, which means they may charge you more to counteract the risk.
However, if you are in need of a vehicle now, there are funders that are more likely to provide you with finance even if there are some risks or negative factors in your credit rating. Essentially, it depends on their specific requirements and your circumstances. It’s important to deal with a credible broker that understands the funder requirements and can give you reliable information on the options available to you. You can read more about leasing with bad credit here.
3. If I pay more up front can I get a better deal on the monthly payments?
Whether you decide to pay a big deposit upfront with smaller monthly payments or a smaller deposit with higher monthlies, you’ll end up paying the same amount by the end of the contract. Because of this, the “best deal” is totally subjective to your needs.
If you feel that lower monthly payments would be better for your situation, then it makes sense to pay a higher deposit. However, if you would rather not pay a large fee up front then you can always make your monthly payments that little bit higher. It’s completely up to you.
4. Which car leasing company has the best deals?
While it may look like a company is offering a great deal, it might not be right for you. It’s important that you research the kind of deals available to you from different companies. Some brokers and dealerships will only supply particular brands and have relationships with specific funders.
This is great if you are looking for that brand because they will have a strong relationship with them. However, if you are unsure as to what you want, you may want to go through an independent broker because they are likely to be able to access deals across a wide range of cars. They are also unbiased, which means they are genuinely interested in finding the best deal for you.
Some companies will simply give you a price at the click of a button, but this is unlikely to be the best deal available to you. However, there will also be companies that will put the work into shopping around for you and structuring your deal in a way that obtains the best price for you.
The broker or dealer that is likely to get you the best deal will take time to understand your needs in order to ensure that you get the best deal and the best car for you. We’ve got loads of articles on vehicle brokers, from how to tell if you can trust a leasing company, to the risks of using a vehicle broker.
5. Does the Time of Year Affect the Price of a Lease Car?
[vc_column width=”1/4″][vc_single_image image=”43354″ img_size=”article-image”][vc_column width=”3/4″]This is probably the last thing you’re thinking about when shopping for a good lease deal but traditionally you’ll find the best discounts in March and September.
This is because this is around the time the new models are released, so dealerships tend to slash their prices in order to clear the forecourts for the newer cars. This means that the prices could be 30-40% cheaper than normal.
Manufacturers and dealerships have monthly and quarterly targets, which affects the deals and the prices. If they are in the third month of the quarter and they are behind, for example, they may go as far as to make losses just to hit volume targets so you may be able to get a great deal.
Although, while there are some particularly busy months, in today’s industry there are deals to be had all year round.
6.New vs. used car deals
You might think that leasing a used car is going to end up being less expensive but generally, you’d be wrong.
If anything, a used car will usually cost you more per month.
When you get a brand new lease car not only do you get a brand new model but you are also protected by the manufacturer’s warranty. Though this warranty time can vary between manufacturers, generally it will last the length of the contract. If it doesn’t, there’s always the option of an extended warranty. When you get a used car, however, the warranty usually only lasts a year. Again, this does vary.
7. Are there hidden costs with lease cars?
Now, I’m not suggesting that a vehicle broker is trying to pull the wool over your eyes here.
I’m just suggesting that you should watch out for any extra costs that may catch you by surprise when it comes to signing along the dotted line. These are things like;
- Maintenance & Servicing
- A brand new Mercedes E-Class might seem like a brilliant deal, but if you ever needed to change a tyre, they can reach £200 each! You can read more about the cost of servicing your lease car here.
- Fuel – obviously you’ll have to run your car.
- Admin fees
- Pretty much all brokers have administration fees but some will be more transparent about it than others. There will be some brokers that claim they don’t charge admin fees but this fee will actually be hidden somewhere down the line. Other brokers, however, will be much more upfront about how much the admin fee will cost you.
- You can read about why you have to pay administration fees here.
This is not an exhaustive list and for more information you can read our article on the extra costs you may face when leasing a car. However, all of the things mentioned above will have an impact on the overall price of your lease vehicle, therefore, it’s important you do your research.
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8. Excess mileage vs. larger mileage allowance
Can I get a better lease deal if I pay the excess mileage instead of having a larger allowance?
Potentially, yes. Mileage has a significant impact on the cost of your lease deal. In some cases, it will be cheaper to keep the mileage low and pay the excess mileage charge but this does depend on the terms and the cost of the excess mileage. For example, for brands such as Audi where their excess mileage charge is just 6p per mile +VAT, it can be more economical to go for the lower mileage allowance and pay the excess at the end of the contract. But for a BMW, however, where their excess mileage charge is 13.9p per mile + VAT, it might not be. It’s all about the cost.
It’s easy for companies to make lease prices look attractive with minimum mileage allowances, but when you start to tailor the deal to suit you, the price can change considerably. This was a pretty brief explanation of excess mileage, but we have written a very detailed article containing everything you need to know on excess mileage which you can read here.
9. Can I get a better deal with lease companies that have been trading longer?
In some cases, yes, the length of time a company has been trading will impact what deal you get. The more security, expertise and length of trading time the broker has, the more likely they are to know where to find the best deal for you.
Companies that have been trading longer will have built relationships and credibility and therefore will have the power to negotiate exceptional deals. While this may not always be the case, it’s something to keep in mind.
10. Does the length of the lease contract affect the price?
In some cases you can secure a better deal by being flexible with your length of your contract. Most contracts last 2 or 3 years and the price varies depending on the car but it would be wise to look at the prices for different contract lengths to compare the prices.
11. Are lease deals better from companies regulated by the Financial Conduct Authority?
This is very important. Being regulated by the Financial Conduct Authority (FCA) is often overlooked, but it’s actually a really significant factor when considering which leasing company to use. If the company is FCA regulated they will follow the ‘Treating Customers Fairly’ principles. These principles protect your rights as a customer and ensure that you won’t be a victim of mis-selling.