Car lease deals for young drivers
Car lease deal
Have you noticed one of your mates driving a brand-new car? Have you also noticed that said mate doesn’t seem to make that much money? Don’t stress – you’re not going mad, and they’re (hopefully) not dealing drugs. They’re probably just leasing!
A car lease is simply the most affordable way to drive a brand new car. However, it’s not without its drawbacks.
How does a car lease deal work?
A car lease is simply renting a car – but for the long-term. Typically, a car lease can last between 1 and 4 years.
With a lease deal, you are essentially paying for the car’s depreciation and not paying any capital towards actually owning it. Your monthly repayments will be significantly lower than with a PCP or HP (on a similarly priced car, of course).
You can choose to sign up with several months deposit or opt for a no-deposit deal if you’re eligible. Like with a PCP, you’ll have a mileage limit and have to be careful not to damage your car in any way.
To get a car lease deal, you’ll have to have a decent credit score – due to that; it’s not very common for young drivers. But it is possible!
Can I buy the car on a car lease?
No – there is simply no option to buy the lease car. Your options at the end of the term are to walk away or take out another lease.
What are the pros and cons of a car lease deal?
There are a few things to consider with a car lease deal.
Drive a new car for a low monthly repayment.
You don’t need to MOT the car – just services!
You don’t have to pay road tax, as you don’t own the car.
You are paying depreciation – you’ll have nothing to show for it at the end of the lease deal.
You can usually only get a lease on a new car. While lower than a PCP or HP on a new vehicle, the monthly payment can still be too expensive for the average young driver.
It’s hard to get accepted – you’ll need to have a solid income and a great credit score.
Car Lease vs HP
If you want to own a car outright, you’re much better going for a Hire Purchase (HP) deal. You’ll pay a higher monthly repayment than a car lease, but the car will be yours to sell on when you’ve made all your monthly repayments!
However, this does mean that you’re likely to be driving an older car than with a car lease. Due to this, though, an HP is typically easier to get accepted for than a car lease deal.
Car Lease vs PCP
The main difference between a car lease and a PCP is that you have an option to buy with a PCP.
If you know for a fact that you absolutely don’t want to buy, you should look into a car lease – as it might end up cheaper, and you could be in a newer car.
With both finance options, you’ll have mileage restrictions and have to be careful not to damage the car.
Car lease vs Personal Loan
A personal loan is for young drivers who want to own the car eventually. As soon as you hand over the cash to the dealer, you own the vehicle.
The downside of this is that the monthly repayments are a lot higher, and you’ll probably need to settle for a slightly older car.
If you opt for a lease, you’ll never own it, but you can drive a new car for more affordable monthly repayments.