Lease is the new Buy
posted on Jun 18 2015 by Rebecca Shipston
Avoid depreciation, the aggro of buying and selling, get a brand new car every couple of years, free road tax – you can see why leasing is definitely on an upward trend. The British Vehicle Rental and Leasing Association (BVRLA) is the trade body for the vehicle rental and leasing industry. They believe 2015 will be a big growth year for car leasing and anticipate a 5% growth year on year for business leasing. A stronger business economy along with a heightened awareness about the benefits of leasing a vehicle cited as the main reasons. You can download the full BVRLA report here.
Since April 2015 leasing brokers have had to comply with the Financial Conduct Authority (FCA), and are now obliged to promote transparent pricing and fairness. This was seen a welcome move by legitimate brokers, including ourselves, and perceived as a positive move for the industry as a whole.
The car leasing industry contributes to the overall economy with 1 in 10 cars now leased* but this is peanuts compared to the USA where around 40% of all cars are leased. Trends often cross the water from the USA, but UK Consumers are still divided on the subject of whether it’s better to lease or buy.
Financing a vehicle is the seconds biggest purchase decision after buying a house, with the average cost of a new car around £20k, it’s a big outlay. But monthly lease payments are cheaper than a loan scheme taken out to purchase a new car which you’re stuck with, and leasing can be extremely efficient for a business.
Monthly contracts are the norm these days, from mobile phone, TV and broadband packages to energy and gym contracts. Consumers are getting used to paying for higher purchase value items on a monthly or instalment basis. This upwards trend means more and more consumers are turning to monthly payment schemes for their cars too.
Maintenance costs can be the biggest risk when you own a car, but on newly leased cars for a few years at a time the risk of something going wrong becomes much lower. All lease contracts include the option of maintenance which includes all servicing, replacements tyres and any other routine maintenance costs required during the lease.
If you like to drive the latest specification vehicles, cars leasing is definitely for you. The luxury of owning a new car every few years really appeals, since leasing is effectively long term car rental. But there is no need to worry about resale value, or have the hassle of selling.
So why not get on board with this trend and say bye-bye to buying and hello to leasing!
*Department for Transport, (2014)