How To Get The Best Deal On A Car Lease
Car leasing is a great way to get hold of a new car for a low upfront payment and affordable monthly rentals. But how can you guarantee that you get a good deal?
Discover our guide to find out what you can do to find the best car lease agreement for you.
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Top 11 tips to get a good price on your lease car
Personal and business lease agreements both involve long-term rental of a vehicle for fixed monthly payments. However, prices won’t always be the same for your chosen vehicle, with the time of year and leasing company just two of the factors affecting how much you pay.
Here’s our top 10 tips to getting a good deal for a new motor you’ve leased.
1. Compare prices from multiple providers and dealerships
If you’re leasing a vehicle from a comparison website, there’s a greater chance that you will get the best price for your chosen model. This is because having access to multiple providers means you also get to many different funders who pay the finance for the deal.
Franchised (tied to one or more manufacturers) and independent (not tied) dealerships also offer leasing as a service thanks to large manufacturers having finance arms that can support it. For example, Ford Credit and Volvo Financial Services are two examples of manufacturers which finance their own deals.
Independent dealerships receive the support of banks in order to compete and offer deals which are just as good, if not better.
After identifying the car you want, we recommend that you use a search tool on a comparison site, such as Moneyshake, to compare offers from providers to quickly get the best deal. If you think you have a good offer, approach dealerships that have the same vehicle to see which one is cheapest.
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2. Choose a shorter lease agreement
While longer a contract term will drive the monthly price of your rentals down, you will inevitably end up paying more. This is because the rentals cover the depreciation (loss of value) of the vehicle.
For example, a Vauxhall Corsa might cost you £178 each month for a 24-month contract, making your monthly payments a total of £4,272. Let’s say your initial rental is three months, which will be three times £178. That would mean an upfront cost of £534. Adding the total of the lease payments to the initial payment gives you the full cost of this deal, which is £4,806.
Now, if we say that for the same car on a 36-month contract, you pay £169 for the monthly payments, this total goes up to £6,084. That’s before your initial rental is paid too. If we use the same structure as before, the three-month initial rental would be £507 (three times £169). Overall, the cost of this deal would be £6,591.
That’s quite a big difference (£1,785) for an extra year. Also, there’s more chance of there being problems with excess damage from extended use of the car. This would mean an additional charge if left unrepaired.
3. Look for stock cars
Contrary to popular belief, stock cars isn’t a reference to the automobile racing sport made popular in America and Canada.
In leasing terms, it means that a vehicle is ‘in stock’ and available to lease from the provider. These cars are often the quickest and most affordable option to get behind the wheel of a brand-new motor, with lead time (the time from order to delivery) taking around two weeks.
Remember: Stock cars tend to come with the standard equipment, without fancy additional gadgets or extras. However, if the model you want is in stock, this can save you a lot on the monthly payment price.
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4. Check out special offers
Special offers are deals which providers and leasing companies promote throughout the year on a wide variety of popular vehicles.
Just like the ‘sales’ page on an online retailer, special offers are worth looking at if you’re not certain about which model you want.
You will often find that the most sought-after trim levels are listed for a fraction of the usual cost too, meaning you get more bang for your buck.
Remember: The listing price on special offers might be for a longer contract term and/or higher initial rental, so be sure to check what the price would be with your preferred deal length.
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5. Search by your budget
Another way to ensure you get a good deal for your new car is to stick to the budget you have for each month.
Many comparison sites and online providers let you search by budget, which is a good way of finding a bargain if you don’t already know what car you want.
6. Choose a lower annual mileage agreement
When you configure your lease car, you’ll be asked to choose how many miles a year you intend to drive each year. Usually this will be anywhere from 5,000-30,000 miles. By choosing a lower annual mileage agreement you’ll benefit from getting a better deal as your monthly payments will be cheaper. This is because the car won’t depreciate as much due to you driving it less miles.
At the the end of your contract, an inspection agent from the finance provider will check your car’s odometer (mileage clock) on collection day to make sure you’ve stuck to your original agreed mileage. Leasing providers charge an ‘excess mileage’ fee at a rate per mile that will be in your contract. This flat rate tends to be anywhere from 5p to 30p, which may not sound like much, but can wind up in you paying a large sum at the end of your agreement.
While getting the best deal is important, so too is avoiding any unnecessary additional charges. To avoid incurring end-of-lease charges, be honest with how many miles you drive per year. You can do this by multiplying your average driving week by 52, with around 5% extra of this total added in for emergency/unplanned journeys.
7. Avoid fancy specs and optional extras
It stands to reason that the more gadgets, metallic paints and leather upholstery you add to a vehicle you intend to lease that it will cost more.
However, we understand that the beauty of leasing is that it allows you to access a vehicle which otherwise would be too expensive to buy outright. So, if you do have your heart set on an all-singing all-dancing motor, it may be worth browsing special offers from multiple providers to see if there are discounts available. Even if the exact car you’re looking for isn’t listed, other similar ones might be on there.
8. Consider the whole cost
When you’re deciding on a lease deal, remember to calculate the whole cost of the vehicle, its insurance and any additional maintenance package you may have chosen to include.
Unless the provider specifies that a deal includes insurance and maintenance throughout the contract (often known as ‘complete care’) then you will need to factor in a comprehensive insurance policy for the vehicle.
Only by budgeting for the whole cost of a car lease can you get a good deal. Not doing so could result in you getting behind on your payments, which would then lead to your credit score being affected, late payment charges and potentially repossession of the vehicle.
9. Look for cars which hold their value
As we mentioned earlier, the monthly cost of leasing a car covers its depreciation, which will vary depending on how long you the lease term is, your annual mileage and the type of model.
This last point is important for you to consider if you want a good deal. Choosing a manufacturer and model which is renowned for holding its value well will help keep the bulk of the lease cost down. This is especially true for longer contracts because the finance provider won’t have to worry as much about the resale value of the car once you hand the keys back.
Although the order of manufacturers that hold their value is regularly changing based on supply and demand, some examples of current frontrunners include Mini, BMW and Volkswagen.
10. Keep the car in good condition
All lease cars need to adhere to the BVRLA’s Fair Wear and Tear standard before it’s collected.
Just like the total mileage of the vehicle is checked when it’s returned to the provider, so too is its condition inside and out. This forms part of an end-of-lease inspection which is carried out in your presence, after which you will be asked to cross-reference a vehicle check form and sign to say you agree with what is said. If you don’t agree with the contents, you can contest a decision to charge you for any potential repairs needed, which you can read about in our guide to returning a leased car.
In short, you can avoid a lot of financial headaches by looking after the car for the time that you spend with it. Whether that involves taking it for an MOT and service (applicable for deals longer than three years) or just performing routine maintenance and getting it cleaned every now and then.
If you want the convenience of being able to take the car to a garage for regular upkeep, you can consider a maintenance package with your agreement. The cost of this can be included in your monthly payments or as a separate direct debit, but it could see you get a good deal by avoiding damage charges at the end.
You can find out all about maintenance packages in our handy guide.
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