Car Leasing

If you need a new car but can't find the cash to buy one outright, leasing for a few years can be a great alternative. Although it's yet to truly take off here in the UK, American motorists have shown that it can work to great effect.

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Advantages

Lower upfront costs

If you're a young driver looking for your first set of wheels, leasing is a great option because you won't have to fork out a huge amount at the outset, instead spreading payments over the period of the lease.

Lower monthly payments

Monthly payments are also surprisingly low - and that means you can get yourself a brand new model without having to risk breaking the bank.

Inclusive packages

If you play it right, you can find a deal that includes road tax and servicing costs - that way you won't have to deal with multiple companies (and all the paperwork) yourself.

Value depreciation

If you buy a car outright, you're constantly worrying that it may be depreciating in value as the mileage clocks ticks away - by leasing this is no longer an issue.

Disadvantages

Damage costs

With a leased car, it's almost as though you're driving around someone else's baby, and that means if you do get involved in any skirmishes the repair costs could leave you out of pocket - as you won't have any say over who fixes it once it's returned.

No re-sale value

As above, the modern tendency is for cars to depreciate in value with age, but one downside to leasing is you can't sell on the car should you ever need a quick windfall.

Rigid terms

If you find that you want to trade in the car midway through your agreement, be warned that you can only do so if you've made at least half of the scheduled payments. In the interim, your obligations could see you miss out if a better deal comes along.

So - is car leasing worth it? It often depends on how long you need your car for. If you're leasing for more than two or three years it may end up being more cost-effective to buy a car outright. The downside to that is you could find yourself stuck with an oudated model, though.

Finding a fair deal

Websites like Leasingoptions.co.uk and Nationwidevehiclecontracts.co.uk are a good place to start looking, as they will match you up with a local car leasing company to save you doing the legwork. Once you're at the negoiating table, however, you need to keep your wits about you.

When brokering a car lease deal, it's important that you give a realistic impression of how frequently you're going to be using your new car. A lot of companies tend to put limits on how many miles you can put in per year - and if you underestimate your drive time you could find yourself paying the penalty.

On top of that, it's also sensible to take a good look at the car before you get your cheque-book out - that way you can make sure you don't get any add-on bills for wear and tear you didn't cause when you go to give it back.

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