The C&TH Guide To Car Leasing
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1 week ago
To rent, or not to rent?
Want a new car without the price tag? Leasing a car is more popular than ever, allowing you to enjoy the new car experience on a loan basis, paying a monthly fee to use the car for a set period of time. The process is simple, but if you’re new to leasing, you might have some questions. We’ve teamed up with AutoTrader to answer some of the most common questions around leasing a car, so put the brakes on that car purchase until you’ve read our guide.
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How Does Car Leasing Work?
Car leasing involves a financing arrangement where you pay a monthly fee to use a vehicle for a set period of time, usually between two to four years. The monthly payments cover the vehicle’s depreciation, as well as taxes and fees. At the end of the lease period, you have the option to return the car or purchase it for a predetermined residual value.
Leasing a car can offer a more affordable and flexible alternative to traditional car ownership. When you lease a car, you are effectively paying to use the vehicle for a set period of time, rather than purchasing it outright. The benefits include lower monthly payments, the ability to drive a newer car more frequently, and the convenience of not having to worry about the car’s resale value. On top of your monthly payments you will be responsible for things like insurance, registration and any excess wear and tear charges at the end of the lease.
What Should You Know Before Leasing?
Always read the small print! Before leasing a car, you’ll need to understand the key terms and conditions of the leasing agreement. The initial payment is the upfront amount you pay when you first start the lease, and this can affect your monthly costs. You’ll also need to consider the annual mileage limit, as exceeding this limit can result in additional charges at the end of the lease, so be realistic about how much you will drive your vehicle. You will also need to consider your credit score, as this can affect the offers that are available to you.
Photo by Jake Blucker on Unsplash
Pros
One of the main advantages of leasing a car is the lower monthly payments compared to purchasing the same vehicle outright, so you can fuel your love of cars without the initial payout. This can be particularly beneficial for those on a tighter budget or who want to drive a more expensive car than they could afford to buy. Leasing also allows you to regularly upgrade to a newer model.
Cons
Despite the monthly fees, you’ll never own the car, and at the end of the lease, you’ll need to either return the vehicle or pay a fee to purchase it. There are also mileage limits and potential charges for excess wear and tear, and leasing may not be the best option if you plan to keep the car for an extended period, as the long-term costs can be higher than purchasing the vehicle without the lease period.
Find out more in the full guide to Car Leasing on AutoTrader.
3 Great Cars To Lease in 2024
*Prices shown are subject to change and correct at the time of publication.
