Personal vehicle leases can be daunting contracts to step into. With so many online deals, quotations and bargains on offer, it’s hard to tell the winning deals from the losing ones. Take a look at these 5 things you need to know about private car leasing to help you find the right deal for you.
1. There is still an up-front payment
Whilst personal leases are on a monthly payment basis, there is still an up-front payment to be made. This payment is equal to a number of months on the rental, such as 2, 4 or 6. The higher the initial up-front cost, the lower the ongoing monthly rental. Some will hide this cost, springing it upon you as a nasty surprise at the end of a conversation or contract write-up, so keep an eye out for it at all times.
2. Excess mileage charges
At the start of any leasing contract, you and the dealer will agree an annual mileage figure that factors into the cost of your monthly rental. Just like when you buy insurance, this is done in increments of 10,000 and should be tailored to your specific needs. It is very important when calculating your expected mileage to be as accurate as possible, and maybe even overestimate slightly if you anticipate extra journeys during your lease. Going over the agreed mileage can be very costly, often being charged at a pence per mile. This may not sound like much, but if you greatly exceed your contracted mileage you could be paying a large sum upon return of the vehicle. Be careful to estimate as precisely as possible and look out for dealers manipulating your mileage for lower monthly rental, but higher end of contract fees.
3. Hidden fees
It isn’t uncommon in any car deal, buying, financing or leasing, for there to be hidden fees. Expect them to crop up at any time, not just at the beginning. Read your contract carefully and thoroughly, looking for administrative fees, non-refundable payments and handling fees that may change the affordability of the deal for you.
4. Premium vehicles
The cost of your lease will be calculated on a number of key aspects of the residual value of the vehicle, such as the mileage, age and condition of the vehicle and the agreed term. You may think your dream car will always be a dream, and this may be true if you were looking to buy, but premium cars are often cheaper to lease as their residual value doesn’t depreciate as fast as other, older models. It’s always worth shopping around for the best deals on the car you’ve always wanted.
5. End of contract damage charges
When your contract is up, you’ll hand the car back to the dealer who will expect it to be in the same, if not very close, condition it was when you drove it off the forecourt. There are minimum standards the vehicle is expected to meet, allowing for fair wear and tear. A lot of trusted dealers will use the British Vehicle Renting and Leasing Association (BVRLA) policy to assess any damage. No one expects the car to be perfect, it will naturally have some scrapes and changes, but be mindful of the policies in your contract, look after any vehicle you lease and expect charges for any major damage.
