Top 5 problems with Personal Leasing
Car leasing has been around for some time now, since the 1990s. However, at that time, it was only really available for business owners who wanted a fleet of company cars.
Now, however, leasing for private individuals has grown 55% in the past few months, according to the BVLRA and is now one of the most popular way of getting a new car. Personal leasing is on the rise, which has led to an increase in people asking about the concept of leasing and what it entails. One of the questions many people ask is ‘what’s the problem with car leasing?’
There aren’t that many problems with personal leasing, which is why it is so popular. It works for pretty much anyone. However, that’s not to say there aren’t a few problems that you should be aware of.
At OSV, we talk to people who are unsure whether they want to lease or buy every day. And we think it’s important that you know as much as possible about each to make the right decision, including the negative aspects.
So in this article, we are going to look at the top 5 problems with personal leasing, and how to solve them. JTNDY2VudGVyJTNFJTNDaWZyYW1lJTIwd2lkdGglM0QlMjI1NjAlMjIlMjBoZWlnaHQlM0QlMjIzMTUlMjIlMjBzcmMlM0QlMjJodHRwcyUzQSUyRiUyRnd3dy55b3V0dWJlLmNvbSUyRmVtYmVkJTJGak92VC1hSVNWWmclMjIlMjBmcmFtZWJvcmRlciUzRCUyMjAlMjIlMjBhbGxvdyUzRCUyMmF1dG9wbGF5JTNCJTIwZW5jcnlwdGVkLW1lZGlhJTIyJTIwYWxsb3dmdWxsc2NyZWVuJTNFJTNDJTJGaWZyYW1lJTNFJTNDJTJGY2VudGVyJTNF
1. There is too much choice
As I’m sure we all know by now, there is such a thing as too much choice. With the evolution of the internet, we are now faced with more choice than we ever have been before, and that includes cars.
You now don’t have to drag yourself from dealership to dealership, talking to salesperson after salesperson, getting quote after quote, to find the best car and the best deal for you. Now, all you have to do is pop online and you have a range of quotes on every single car you can dream of.
There isn’t much of a solution for this one, apart from simply being prepared when you do start looking at quotes.
We would suggest looking at your current car. What do you like about it? What would you improve? Do you need a larger car for a growing family? Or do you want something a bit sportier now the kids have cars of their own? You also need to think about how long you want the vehicle for. When you lease a car, you can have the vehicle for anything up to about 5 years. Therefore, you want to think about whether you will want to have a shorter contract or whether you like having your car for a bit longer.
Once you have done that, you have a rough idea of what you are looking for and then you can start doing your research online. There are so many cars that it can be overwhelming, so having an idea of what you want will make things much easier.
2. Where to get the vehicle
Traditionally, you would go to a dealership to get your vehicle. However, the rise of leasing and the internet has paved the way for the rise of vehicle brokers. So now you are faced with another decision; which one do you get your car from?If you go through a dealership then you have to be sure on what brand you want. Otherwise, you will have to be prepared to travel to several dealerships on your Saturday to talk to sales people and get lots of quotes. You also won’t get an unbiased view because each dealership will tell you that they have the best deal. However, if you go through a dealership then you can test drive the vehicles there and then. And, you might still get a good discount because of the relationship the dealership will have with the manufacturer. However, dealerships often don’t have access to many finance houses, which means that you might not get the best deal for your situation. [vc_single_image image=”60855″ img_size=”article-image”]If you go through a vehicle broker, however, then you don’t have to leave your own home. You can do everything over the phone. Many vehicle brokers are independent, which means they can give you an honest opinion about what they think is best for you. Experienced vehicle brokers also have strong relationships with many finance houses, which means that they have a high chance of getting you a bigger discount. However, if you want to test drive a vehicle, you will still have to go into a dealership. You will also have to wait for your car to be delivered, you can’t just drive away with it there and then because vehicle brokers don’t have showrooms full of cars.
3. You have to decide on your mileage
When you lease a car, you have to stick to a pre-agreed mileage. Generally, this is anything up to 30,000 miles a year. If you go over this mileage, then you will be subject to a charge, called an excess mileage fee.
Deciding on your mileage can be tricky because it can greatly affect how much your lease contract costs. The higher the mileage, the more the vehicle will depreciate, the higher the monthly costs.
We suggest having a look at how many miles you have done in your current car. Are you likely to do that many for the duration of your lease contract?
You can also increase your mileage but you cannot decrease it. You can increase it after the first year. Therefore, if you really aren’t sure, we suggest going for a lower mileage and then if you do go over it in the first year, you can always increase the mileage for the rest of the contract. It’s better to increase it rather than not use all the mileage and end up paying for it anyway.
4. You have to get it serviced
With a lease car, you are contractually obliged to get the car serviced. How often this happens depends on the manufacturer’s guidelines, but you have to make sure that it is serviced at the required intervals. [vc_single_image image=”60465″ img_size=”article-image”]You will also have to pay for the servicing yourself. And, as per the manufacturer’s guidelines, the chances are you will have to get your vehicle serviced at a franchised dealer. This is opposed to a third-party garage you may have got your car serviced at in the past. If you do not, then you could face additional charges.
Getting your car serviced can be pricey, and you might not want to part with that much cash in one hit. Therefore, one solution is to look at a maintenance agreement.
A maintenance agreement is an additional cost on top of your monthly payments that covers the cost of the servicing for the duration of your contract. It essentially staggers the cost so you don’t have to pay for it all in one hit.
5. You have to keep the vehicle in a good condition
When you lease a car, you have to keep it in a good condition. This has to be in line with the BVRLA Fair Wear and Tear Guide. The BVRLA Fair Wear and Tear Guide is the industry standard for the condition of all lease vehicles upon their return.
If the vehicle is in a condition that is outside of the guidelines, then you will face extra charges.
When your lease car is due to be returned at the end of the contract, it will undergo an inspection. Before this inspection, we recommend going over the car thoroughly, while referring to the Wear and Tear Guide. Treat the vehicle as if you were going to buy it, and anything that you would pick up on, get it repaired.