Getting a car on a lease can often sound like a very tempting idea. After all, you can typically get a much more extravagant vehicle for a lower price using a car lease. However, knowing when it is right to do so can be hard.
There are so many different variables that you have to consider before signing up for a car lease deal that knowing when it is the right time can be confusing. In order to help with that, we wanted to take a deeper look at each of these “variables” and help you figure out when you should lease a car. So, let’s take a look!
Choosing The Right Time To Lease A Car
Getting a car on a lease is an important decision as you will be signing up for a financial commitment that typically lasts 3 years or so. Therefore, you always need to make sure that you are prepared and able to sufficiently hold your end of the car lease deal. On top of this, you should always ensure that the car you get through the lease will be suitable for you and your lifestyle, since you will basically be tied to it for the duration of your car lease.
As you can tell, there are a lot of different things you need to consider and think about before you sign up for a car lease deal. A summary list of just a few of these follows;
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Making sure you can afford the monthly payments
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Checking that you have the deposit available
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Ensuring that there is a mileage option suitable for your needs
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Look at which spec of the vehicle you can afford with and without a lease deal
However, a summary list isn’t particularly helpful, really. That’s why we are going to look at each of these aspects in more detail. That way, you should be able to determine whether it is the right time for you to be taking on a car lease deal.
Check Your Finances
The very first thing you need to consider if you are thinking about getting a car on lease is your current financial situation. As a car lease is typically a 3 year financial agreement that you will have to pay each month, you will need to make sure that you are in a financially stable situation.
Failure to pay the lease deal will definitely affect your credit score and cause you to lose the car. As such, you need to be certain that you will be able to pay the monthly fee for the duration of the lease.
On top of this, there is also the issue of getting a deposit together. Comparing lease deals to buying a car outright, the deposit for lease deals is considerably lower. That said, they still typically reach over £1000, sometimes going up to £5000 for more extravagant vehicles. So, you need to make sure that you have that cash available. You won’t be able to get a loan for the deposit as well as the car lease deal.
Getting The Deposit Together
Since we have already mentioned that you will not be able to get finance or credit to cover the initial deposit of the car lease deal, you will, instead, have to have the cash ready to pay upfront. So, that instantly determined whether now is the right time for a car lease. Do you have the money for the deposit? If yes, that’s great. If not, then you’ll need to get that money together before you can apply for a car lease deal.
So, how can you get that money? Well, the most obvious answer is to save up some money each month. Put aside the same amount of money that you can afford to pay each month for the car. Use that as a gauge to determine what your monthly budget is while also building up your deposit.
This may very well take time, delaying the point when you can get a lease deal and a new car. However, it will also make sure you are fully aware of what you can pay each month, meaning you will be in a far better situation to repay the car lease.
You will also be more likely to stay clear of financial difficulties outside of the car lease, since this method of saving up for the deposit forces you to budget for that specific monthly amount of money already.
Take A Look At Your Current Vehicle
Before you even start saving up for a deposit, or if you have that amount of cash already, before you start looking at which car lease deals are available, there is one more important step. Take a step back and really look at your car. Does it need to be replaced outside of your desire to get a new car?
Realistically, the answer is probably yes, but take a moment to check. For example, have you regularly had to fix different parts of the car? Is the thought of taking it in for another MOT terrifying? Is the vehicle too small for your family’s requirements? Perhaps it is uncomfortable to drive?
Each of these is a valid reason to get a new car, but just go through and note down each and every issue you have with your current vehicle. Doing so will give you a list of key points to consider when choosing a brand new car.
Incidentally, we have covered the different things you should do to help choose a specific car to get on a lease deal in a previous article on this site, which you can read here.
Compare The Lease Deals and Other Prices For Your Preferred Car
Okay, so you have now saved up your deposit budget, figured out how much you can actually afford to spend each month and are ready to get yourself that nice new car – well, stop! There are still other things you can do to help make sure that you get both the right car and the right car lease deal.
Specifically, there are three more points that we need to cover. However, each one of these can be done whilst looking at the lease deals that are available. So, you can have the fun of looking through all of the available car options whilst also working to make sure the one you get is right, or you may find that there isn’t a car available at the moment that is quite right, so you can check again at a later date.
Anyway, the three points that we are going to look at next are as follows;
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Is the deposit for the vehicle cheaper than the price of buying that car second hand?
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Does your monthly budget allow you to get a higher specification model without increasing the spend?
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Is there an option that allows for the necessary mileage that you drive on an annual basis that is still within your monthly budget?
After all, one thing you will notice is that the prices of the car lease deal depend largely on how many miles you drive annually. If you have long commutes to and from work, for example, you might find that some car lease deal monthly payments are much higher than if you only drove a small distance.
Is The Deposit Cheaper Than The Second Hand Price?
So, step one of this phase; look for a car that tickles your fancy and read up on the deposit needed to secure the car lease deal. Next, take the value and compare it against the second hand sales of the same car.
However, please do make sure you are comparing apples with apples. Specifically, compare the deposit of the car with the second hand price of the same car and same model variant. If the vehicle available for lease comes with a host of extras, also check the second hand listings for the car with the same extras.
Doing this will have to give a fairer comparison, meaning that you can make a more informed decision about whether the deposit is better value for money. Incidentally, it generally is.
Are You Able To Afford A Higher Spec Model On Car Lease?
Having determined that paying the deposit is cheaper than buying a second hand car of your choice, the next hurdle to jump over is whether or not you should be getting the base model of the vehicle or a more extravagant variant of it.
The best way to decide this, of course, is down to the money it would cost to get your hands on one of the higher specification variants. Does your predetermined budget allow you to go for the more luxurious model of your preferred vehicle, or are you limited to the standard version. Each of these scenarios, of course, are perfectly fine and depend on the budget you determined in the earlier steps.
Make sure that you don’t go over your budget either!
This is incredibly important as you will need to be able to actually pay the monthly fee for the car lease deal. So, since you have decided a budget per month, stick to it. But take a look at what the best variant you can afford is. That way, you can rest assured that you are making your money go as far as it possibly can, getting the best value for money that you can do out of your car lease deal.
Is There A Mileage Option Suitable For You?
The last thing that we wanted to cover today was the mileage that you get with a car lease deal. When you are signing up for a car lease, you will be signing an agreement that you won’t drive more than a predetermined number of miles each month.
Going over this limit in mileage will incur additional costs, typically calculated per mile! This can very quickly add up, meaning that you would end up paying far more than expected. So it is really important that you focus on how many miles you are going to drive each year. Look back over the past year or two and work out how far you have actually driven.
Analyse your commute, think about the school run and shopping trips, and calculate the most likely average mileage per week. From there, you can work out what the most likely mileage you need for your lease deal is so that you can avoid those excessive additional costs. Obviously, that is really important when you consider the fact that you have to budget the monthly expenses and this additional cost could break the bank.
That said, as long as you specifically look at and choose the correct mileage option for the car lease deal, you will likely save a lot of money compared to actually purchasing a car outright.
Applying For A Car Lease Deal
So once you have ticked all the boxes, ensuring that you have the deposit in place and are able to pay the monthly fee without failing, whilst also making sure that you know how many miles you need to drive annually, it is time to start looking for the right car lease deal for you.
We have covered all the things you need to consider when choosing a car lease deal in a previous article which you can find here. However, in short, you need to list out what the necessary features a car must-have for your lifestyle are, and then separately list out the features you would like to have but aren’t necessary.
Once you have done that, the next step is to go through all of the car lease deals available and compare them until you find the right one for you. If you are at that stage, you could take a look through our list of car lease deals here.
Each and every one of the car lease deals on this website is up to date from the dealership, and we work with a number of dealers, so you are sure to find the right vehicle and car lease deal for you.