The 5 things to remember when Leasing a Car or Van for the first time:
1. Work out what mileage you are likely to cover each year. The more miles that you do, the more it will cost you. This is because the more miles a vehicle covers, the less it will be worth.
You will generally work for 46 weeks of the year; so, if you use your vehicle for commuting you will need to factor in your work journey as well as your social and domestic journeys.
Most leasing companies will have a pence per mile charge for every mile you go over your contracted mileage. There is only one company that we are aware of that can offer rebates on the mileage that you don’t use, back to you, and that is: Leasing Plus Ltd. (Sorry for the plug so early on).
2. The higher your deposit the lower your monthly payments. That makes sense, yes. However, it’s important to remember you do not own the vehicle so don’t lose your spare capital at the beginning of the contract. We usually say go with a sensible deposit of either 3 or 6 times your monthly payment.
The leasing company should give you advice to help fit your budget. The leasing company has to consider that the leaser may default on the vehicle during the term, higher value vehicles may demand a higher deposit.
3. Maintenance is generally not included in the proposed deal. The leasing company will recommend taking out a maintenance package. Remember that these companies deal with larger volumes of vehicles than Joe Bloggs off of the street. So, it goes without saying they will have deals in place that secure their business at certain garages or dealerships and this will be cheaper than you will be able to ordinarily achieve.
Our advice would be to choose a leasing company that uses main dealer servicing in their package. It shows a level care that they are willing to give to the vehicle that you put your family and children in. The leasing company is invested in keeping that vehicle at the highest standard they can.
If you chose not to take out their package there are other options, but usually the leasing company will write into your contract they will want whilst that vehicle is in your care; main dealer servicing and manufacturer specified tyres as a minimum.
4. Depreciation isn’t a direct worry for yourself. For example, if you chose a diesel vehicle and then the government bans diesel vehicles in cities 4 years away. Your vehicle will devalue hugely because the demand for a diesel car will be less. However, if you have leased the vehicle that residual value after the 2, 3, or even 5 years isn’t your problem. The lease company will be the ones taking the hit on it. And rapid devaluing can happen for a number of reasons not just fuel; manufacturers going out of business, new tax laws on emissions, rise in price of parts because the raw materials aren’t so prominent, new technologies, environmental awareness etc etc
5. Returning the vehicle. Yes this is the concern many have, our first bit of advice would be make sure your leasing company is part of the BVRLA. The BVRLA make sure that there is a fair wear and tear policy in place and that the leasing company adheres to it. It also means that if you’re not happy with the leasing company’s decision on some damage, you have somewhere to give advice.
We would also advise that before the term of your contract ends you speak to your leasing company about the damage on your vehicle. They should offer you a free inspection and then advise whether it is worth getting an issue fixed before the return or not. Again, important to remember leasing companies deal with car and vans all day. They have body repairers that can fix things cheaper than the average customer, and thus will probably offer you trade price to fix the issue. In some cases, a damage waiver is in place. This is another reason to speak to Leasing Plus Ltd who do have an option of this service.