| Legendary oil barron Paul Getty once said “if it | | | | First you can have a new car every 2 to 4 years |
| appreciates, buy it. If it depreciates, lease it”. | | | | depending on your leasing contract and company. |
| Many would say that’s surely just common | | | | Monthly payments are on average 33% to 55% |
| sense. But if such lessons in money management | | | | cheaper than a normal car loan, not to mention |
| are so obvious, why then, do so many people | | | | that there is no need for a huge up-front deposit, |
| nowadays readily buy into shrinking markets? | | | | normally the majority of leasing contracts only |
| Take buying a house for instance. If you take out | | | | ask for a small deposit of 3 monthly payments. |
| a mortgage in the current economic climate, | | | | In most cases the vehicle’s warranty cover |
| chances are you’ll start the repayment in the | | | | the lease period which covers most of the |
| negative - which, in a strange way, means a guy | | | | maintenance costs and road taxes are usually |
| standing outside your house would own more of it | | | | included in the lease. But without a doubt what |
| than you do! Despite this, it’s common for | | | | attracts most people to lease car is that fact that |
| people to look upon renting property disparagingly | | | | you are able to drive away a car that you might |
| - as money down the drain. Even though taking | | | | not even dream of buying if you had to buy it or |
| out a mortgage is a commitment that could end | | | | ask for loan to purchase it. |
| up losing you money. For an investment of that | | | | How the lease price of a car is determined? |
| size not to make a decent return (if any) | | | | There are various factors that are taking into |
| isn’t common sense! | | | | account to determine the leasing value of a car. |
| The truth is that an educated customer, with | | | | First and foremost the initial purchase price then |
| greater knowledge and information at hand, will | | | | age, millage, condition and two other factors that |
| always get the best deal – whether it’s | | | | will need a bit more explanation. |
| looking into property or a new car – and will | | | | The first factor is called depreciation and it refers |
| be better positioned to negotiate beneficial terms | | | | to the reduction in the car’s value caused by |
| of any agreement. | | | | age, mileage and condition. The make and model |
| The problem is most people are guided by | | | | have great influence on the depreciation value and |
| conventional knowledge which so often are the | | | | is worth noting that a vehicle’s depreciation is |
| result of uninformed hear’say. Car leasing is | | | | greatest during the first year. |
| slightly different from taking out mortgage to buy | | | | The second factor that influences in the lease |
| a house which usually appreciates in value after | | | | price is called residual value – this term refers |
| purchase whereas when you buy a new car the | | | | to the predicted value of your car when it |
| minute you drive out the dealer it loses value. | | | | reaches the end of the lease. |
| Taking out a car lease or contract hire agreement | | | | What are the best cars for Leasing? |
| to purchase a car you are simply paying a set | | | | This answer is succinct and very straight forward. |
| amount a month for something that is losing, not | | | | Cars made by German manufacturers as they |
| gaining value. | | | | depreciate far less than other brands. Take Audi |
| Some might say what is the point in all this, pay | | | | for instance there are Audi leasing options that |
| for something that loses value and its not really | | | | allows you to drive away an Audi A3 for as little |
| yours. But there are other benefits that make car | | | | as £240 a month a lot less than what you |
| leasing more attractive than buying a new one. | | | | would pay for a loan on the same car. |