Car leasing has grown increasingly popular over the past few years, with more and more people choosing to lease a car instead of buying outright or via dealer finance. Nevertheless, there are some people who still believe that leasing is best for business, rather than family life which isn't always the case.
If you're looking for a new family car and are new to leasing, Nationwide Vehicle Contracts has put together a short list of the advantages and disadvantages of leasing a car for your family to help you make an informed decision.
Let's start with the benefits...
If you have a family, then you know the rule: safety comes first. As a result, you want the very best safety technology and gadgets in your car that can protect your family in the event of an accident. Many older cars cannot compare in terms of safety with a brand new one, particularly when you consider the advancements in car safety technology over the past few years. By leasing a new car every two to three, you can take advantage of the latest in in-car safety and rest assured that you and your family are in safe hands.
Another big advantage of car leasing is that you don't have to worry about selling the car as this job falls to the lease company. This means that you not only save important time by not having to deal with potential buyers, but you don't lose money due to high depreciation costs.
Nowadays, air pollution is a major issue for many modern cities. According to the research by Kings College as published in the Guardian (2016), air pollution is at an alarming rate with concentrations of nitrogen dioxide on Oxford Street in London amongst the worst on earth! If your current car has high CO2 emissions, perhaps its time to invest in a new low emission vehicle, hybrid or electric car?
Nobody likes spending a fortune on fuel and the chances are, the older the car, the "thirstiest" it is. Fuel economy is a top priority for car manufacturers with almost every manufacturer offering a hybrid, electric or fuel efficient vehicle in their range for improved fuel economy. By leasing a car, you can take advantage of the latest technology developments every 2 to 3 years to ensure you're making the most of your money, particularly at the fuel pumps.
Looking after the family budget can be extremely difficult but with a car lease, the monthly rentals are fixed for the duration of the contract, making budget planning easier. The majority of car manufacturers also provide 3 years warranty on your new vehicle so you can rest assured that if anything was to go wrong with the vehicle, chances are it'll be covered under warranty.
Clear on the benefits? Now lets take a look at some of the disadvantages...
At the end of your leasing contract, you must return the vehicle to the finance company in a well maintained condition. The vehicle will be inspected for any damage that falls outside what is deemed ‘fair wear and tear’. According to BVRLA guidelines, fair wear and tear is the damage that occurs to a car or van as a result of normal use throughout the period of its lease. However, if you return the car with any damage that falls outside what is deemed ‘fair wear and tear’ (e.g. bumps, scrapes or other kinds of damage) then you will be liable for any excess damage that is found. You can read more about fair wear & tear here.
A lot can change during the life of your lease contract so if you think your financial situation is likely to change during the lease contract, it is worth exploring your other options to ensure that leasing is right for you.
When it comes to car leasing, you should take into serious consideration the mileage allowance. If you are planning to take your leased car on long road trips, you may exceed the agreed mileage meaning your liable for excess mileage charges at the end of your contract which is charged at rate per mile. This is unlikely to happen if you choose the appropriate mileage allowance to suit to your needs at the start of the contract but its certainly worth bearing in mind.
As most lease contracts are between 2 to 4 years, most customers change their cars every 2 to 3 years but if this option does not appeal to you, leasing may not be for you. Nationwide Vehicle Contracts work hard to build a strong relationship with our lease customer to make the renewal process as smooth and as easy as possible but if you'd prefer to keep the vehicle for longer than 4 years, it may be worth looking into other funding options.
With a contract hire or personal contract hire agreement, you will never own the vehicle as there is no option to buy it. Instead you pay to ‘rent’ the vehicle throughout the duration of your contract, and return the vehicle at the end of the agreement, leaving the finance company to worry about depreciation values and disposal of the car. You can find more about Personal Contract Hire here.
Think leasing is right for you? Check out our recent blog post with the top 5 family cars available for lease with Nationwide Vehicle Contracts for inspiration for your next lease car.