As excited as you may be at the prospect of buying a new motor, you should bear in mind that there are very few things that depreciate at the speed of a car. In fact, the second you drive it off the forecourt, its value drops substantially.
So what do you do if you want some brand new, but are worried about the vehicle retaining its worth?
Personal leasing could be the cost-effective and easy-to-manage solution that you're looking for.
What is personal leasing?
Personal leasing, or personal contract hire (PCH), is a term that refers to leasing a car for an agreed period of time, at a fixed monthly cost that suits your budget. Once the contract is up, you hand the car back and are free to take out another lease for a shiny new car.
It is a simple and easy process that has been designed to save you time and money, as all servicing and maintenance costs can be provided under the lease, meaning you are less likely to be faced with surprise expenses.
The car
The first thing you should choose is a car that not only suits your budget, but also your lifestyle too. There would be no point in looking at a compact car if you have a large family and vice versa. Have an idea of what you're looking for before you approach a deal or garage, as this way you won't be swayed into picking something that doesn't really fit your needs.
Terms and mileage
The terms of your lease and expected annual mileage will affect the amount of money you pay each month, so it is important that you consider your personal requirements before you take out a contract. Providing an accurate estimate of how many miles you travel every year will help you avoid paying any excess mileage charges at the end of your lease. A good indicator of this is to see what was noted on your last MOT and how many miles you've done since.
Finance
Once you have agreed the key terms of your lease, the dealership will ask you to complete a finance application. This form will ask for some personal details, including name, address and employment status, just like a request for a loan. Sometimes the finance company can ask for additional information to support your application, such as bank statements as evidence that you can afford the monthly payments.
The dealership will then order your car, arranging a delivery time and place with you.
Delivery of car
Your new car will usually be delivered on transporter or can be driven to your chosen address by a delivery company. At this point, it would be wise to give the vehicle a once-over, to make sure there are no issues.
Check for any damage, scratches, missing extras (such as alloy wheels) and the warranty and service book. If you find any problems, do not sign the delivery note and get in touch with the dealership to advise them of the situation.
Have a look at the mileage – if it has been driven to your address, it could have several hundred miles on it. Note the exact amount on the delivery note so the figure does not get deducted from your agreed allowance.
What happens next?
That's up to you. Once your lease is up, you can decide to take out a new one on a different car, allowing you to upgrade, or you can walk away without any strings attached. The decision really is yours.
If you do fancy entering into a new agreement, you should start the process a few months beforehand so you're not left without a car while a new one is being delivered.
Posted by George Davis