How to Determine if Car Leasing Is the Right Choice for Your Budget

Are you considering getting behind the wheels of a new car? If so, you’re probably sizing up the different options out there. While the only true option used to be buying on finance, there aren’t many of us who can afford to buy a car outright. Fortunately, another option has become a very popular one of late, and that’s car leasing.

Many people rule out this option because they don’t think they can afford it. That simply isn’t true. In fact, if you look around for the right car leasing deal, it’s an option that can save you money. Now it’s time to learn about car leasing and the costs involved.

What’s the Cost of Leasing a Car?

There isn’t a single set answer here, as it’s dependent upon the car and the type of deal you manage to get. When you look to lease a car, however, it should be around the retail cost minus the estimated residual value divided by the number of months in the contract in addition to the admin fees. That will give you an idea of the monthly payments you can expect.

If you’re looking for a lower price than the one you’ve found, you’ll almost always find one to take advantage of if you dig deeper. It’s just about knowing where to look. There are some places with special offers that include top-selling vehicles for both personal and business use that may come with a heavy discount for you to act on.

What Determines the Cost of Car Leasing?

There are different factors that affect the monthly cost of a leased car.

The first one is the type of vehicle.

The second is the duration of the contact, as it can range from one to five years.

Another thing to take into account with car leasing is the mileage, as it helps to determine the value of the car once your contract is over.

You’ll also need to make an initial payment. Both this and your credit score are two other factors that can affect your monthly cost.

What’s the Criteria for Car Leasing?

Before you bite the bullet on a car leasing deal, make sure to create a budget so that you’ll know how much you have to work with.

Your budget should factor in the monthly amount you’re willing to spend, the number of miles you think you’ll rack up, what you’ll need to pay for insurance and whether you’ll have enough money to cover any maintenance costs the vehicle will need.

Q & A

Here are a few more questions to ask yourself in order to decide whether car leasing is right for you or not.

Will I look after my car?

You don’t own the car, the finance company does. So when you give it back, it shouldn’t have anything beyond fair wear and tear. Should your child stick chewing gum to one of the seats or you crunch into a concrete bollard, you’ll be the one responsible for putting it right. 

Will I be able to continue the lifestyle I’ve become accustomed to?

If you intend to lease a Mazda MX-5 and are also planning on having children in the not too distant future, think again. The two-seater isn’t meant for families. Consider what you’ll want from your car over the next few years in order to help you in deciding which one to lease.

Am I okay with not owning the car?

When you lease a car, it belongs to the finance company and will never become your property. You need to ask permission if you wish to make any alterations, and once the contract is over, you’ll need to give it back. It’s not that different from renting a property, really.

Will I need GAP insurance?

You’ll need to buy insurance separately, and that insurance needs to be fully comprehensive. GAP insurance is another option. It covers the difference between the cost of replacing a vehicle like-for-like and a motor cover payout, should your car be written off or stolen. You should also consider insurance, as it can cover you for bumper scuffs, dents, wings, and scratches. Just make sure to read the small print before you sign a policy.

Conclusion

So if you’re considering leasing a car, hopefully, this article has given you some food for thought and convinced you that it’s an affordable option after all. You’ll find some great offers out there once you start looking for them.