For many new drivers, buying a new car is simply unaffordable. However, leasing a vehicle is often the easiest and most cost-effective way to get behind the wheel of a brand-new car without burying yourself in debt.
Car leasing has been a common practice for many commercial businesses and has become quite popular among consumers. There are several advantages to leasing a car, but before you do, use a comparison website to view leasing deals and secure the best offer.
Why Do New Drivers Prefer Car Leasing?
Car leasing’s popularity has skyrocketed over the years and is now available to most people, including self-employed individuals and those with a bad credit history.
Since many new drivers are young adults, most will not have an existing credit history. This makes car leasing a viable option compared to applying for car finance.
A major attraction for new drivers is that leasing a car is an affordable option for monthly payments compared to vehicle finance. Leasing agreements are typically for two, three, and four years.
After your leasing agreement has ended, you can change the vehicle for a newer car, return the car, or if you choose to continue driving your leased vehicle, there are no final balloon payments.
You might also be wondering if you can sell a leased car? You can, indeed. There are several approaches you can take. Those who have a car lease can sell their cars because there is a growing market for used vehicles, particularly if their lease is about to expire. In the end, they might even turn a profit on the sale. The process for returning a leased car at the conclusion of the lease term will be familiar to everyone who has ever done so. Selling a leased vehicle, however, is an altogether different matter.
What Are the Benefits of Leasing a Car?
Leasing a car has several benefits new drivers will appreciate.
You Get a New Car Every Two to Three Years
Every year car manufacturers are finding ways to make their cars bigger, better, and much safer. Leasing a vehicle allows you to upgrade the car to a more efficient and safer model once your lease agreement ends.
Additionally, you can drive vehicles with the newest technologies, safety features, and impressive fuel efficiency. As your life progresses and your needs change, you can lease a vehicle that suits your needs.
When buying a car outright, consumers seldom have the capital to buy a brand new car so they opt for second hand cars. Second hand cars come with hidden issues that new cars won’t have. You have the added benefit of driving a reliable brand-new car that will get you from A to B and, in most cases, comes with a manufacturer’s warranty.
If you experience factory-related issues with your leased vehicle, your leasing agent will return the car to the manufacturer, and the car will be replaced at no cost.
Maintenance and Repairs
One significant advantage to leasing a car is that the leasing agent provides service and maintenance. It’s crucial not to confuse service and maintenance with damages and repairs.
Most lease agreements come with insurance that covers various repairs and damages when your vehicle has been damaged in an accident, vandalism, or theft. The leasing agent will routinely provide service and maintenance when the new car breaks down.
Never Worry about Depreciation
One of the most expensive aspects of driving is wear and tear, better known as depreciation. Before buying a new car, the residual value is often considered to determine its worth when the time to sell it comes.
When leasing a car, all risk associated with the residual value is not your burden to carry. This allows you to return the car at the end of the lease agreement and never have to worry about depreciation.
What Are the Disadvantages of Leasing a Car?
While the advantages of leasing a car far outweigh the disadvantages, understanding the disadvantages is important.
You Do oot Own the Car
When the lease agreement ends, the car needs to be returned. Unlike selling a car you own, you will not receive an additional financial boost with a leased vehicle. The car’s title is still held with the leasing agent throughout the lease agreement.
Missing Payments Affect Your Credit Score
Missing your monthly payments can negatively impact your credit score. If you are trying to build your credit history, multiple missing payments can affect your credit score, which affects applying for loans and credit in the future.
- Customisation is not Allowed
Since you do not own the leased vehicle, you are restricted in what changes you can make, and a personalised licence plate is about the only change you are allowed. There are optional features that you can negotiate onto your leasing agreement, but they will cost you extra.
Leasing a car is easier than you think. For many new drivers, especially young adults, applying for vehicle finance is impossible due to their lack of credit history. As new drivers build their credit, they can enjoy driving a new car and afford the monthly payments.