Many of us have our dream cars, whether it’s a wilderness-conquering 4×4, or a continent-eating super saloon. Unfortunately however, they tend to come with a bit more of a price tag than your everyday run-around, which makes them apparently out of reach for many people, especially if they want to pay for the vehicle outright. Even finance can be difficult to get in the current economic climate. But what you might not realise, is that not all of those people driving around their Jaguars and BMW have bought them. In fact, the executive and luxury car segments are predominantly made up of drivers who do not own their cars. They are usually leased. And if you’re really wanting to get your hands on the wheel of a car like this, it could well be your best shot too.
How it Works
The concept is really very simple indeed. Rather than you either paying one lump sum for the vehicle, or paying parts of it off each month, you’re doing something very similar to renting. You pay a fixed sum each month to a company like Car 4 Leasing, usually with a deposit at the start of the agreement, and that allows you to drive the car around. You don’t own it, but the car is there for you to use for the entirety of the agreement, which is often three or four years. Once the contract is up, you give the car back and the payments stop.
The advantage here over things like taking out a loan is that the cost will be far less because you aren’t thinking about depreciation, and the leasing company gets the car back at the end of the agreement, so you aren’t paying for the full cost. The fact that you don’t own the car might seem like a bit of a negative, but bear in mind that it means you can instantly swap to a newer model as soon as the agreement is up.
Another caveat to mention is that there are generally mileage limits per month, after which you have to spend additional money on the distance, but you can easily avoid this by setting a sufficient limit in the first place.
So there you have it. If you’ve got a car in mind that you think is out of reach, have a look to see whether leasing could actually bring it in under budget.