5 Mistakes You Need to Avoid When Leasing A Vehicle
Are you thinking of leasing a vehicle instead of buying one? Leasing is growing in popularity more and more every year as people find out about all the amazing benefits that it has to offer. If you want to drive a brand new car, then there really is no better option than leasing, however, it can be very expensive if you don’t do your proper research beforehand. Over the years we have found that there are a few common mistakes that people tend to make time and time again. So, if you are thinking about leasing a vehicle then you will want to check out our top tips below, so you know what mistakes that you need to avoid.
Don’t Pay Too Much Money Upfront
When you are shopping around for the best vehicle leasing deal, we would recommend that you do not pay any more than what you have to upfront. You will tend to find that low monthly leasing deals are offset by a higher initial cost upfront which is essentially paying off a large portion of your car lease in advance. While the car would be insured and the leasing company would receive their money back for the car, it is likely that the money you paid upfront would not be refunded. This means you would be out of pocket and a car. We would recommend that you only pay up to a few thousand pounds up front for your car lease and this will ensure that you don’t end up losing more cash than you possibly would have.
Don’t Forget to Pay Gap Insurance
Most people already know that as soon as you drive car out of the lot, it instantly depreciates in value and with leased cars, this principle is exactly the same. This means that it is then in your best interest to ensure that you have gap insurance on your car. If you are unfamiliar with gap insurance, this is essentially the difference in how much you owe on the contract and how insurance businesses value your vehicle.
So, if you have a leased vehicle that is then stolen or it has been written off, then the insurance company will only make a payment for how much they have valued your car at and you may find that this won’t cover the full amount that is on your lease. This means that it is you who will be liable for the gap inbetween and unless you have gap insurance, you may find yourself out of pocket to pay this. So, if you are going to be leasing out a vehicle, make sure to ask whether or not this is included in your contract.
Don’t Underestimate Miles Driven
Many people forget that when they are leasing a car, they will have to stay under the mileage limit, otherwise, they will be hit with high fees once they have returned the car. You will tend to find that most leasing companies have a miles limit of anywhere between 10,000 and 15,000 and you will then be charged for every mile that you are over your contracted limit. Make sure that when you are taking out a vehicle leasing contract that you take a close look at how many miles you are currently driving as this will provide you with the best indication of what leasing agreement you should opt for and whether or not it is worth you asking for the higher limit. For example, if you are going to opt for a vehicle such as the 40 year old VW Transporter Van that is perfect for trades businesses then you may need a higher mileage if you or your employees are going to be driving around all day.
Make Sure You Maintain Your Vehicle
If you are the type of person who doesn’t look after their vehicle, then you may want to think twice about leasing. While general wear and tear may suffice, anything more than this won’t and you could be caught out with additional fees that you will have to pay when handing the car back to the leasing company. It is important to remember that what is normal wear and tear will be different from company to company and so before taking out a car leasing contract make sure you have a copy of any lease-end condition guidelines.
Don’t Lease the Vehicle for Too Long
Finally, the last mistake that you will want to avoid when leasing a car is leasing them for too long a period. You will find that most terms range from two to four years, however, if you are taking out a leasing contract longer than this then you will be hit with more maintenance bills. We would recommend only leasing a car for its maximum warranty period, which varies from lender to lender.