If you’re thinking of driving a new car in 2014, you’re not alone. Over 2 million new cars are expected to be purchased in the UK this year, and new figures show that almost three quarters of the cars bought by private buyers in 2013 were funded using car leasing, contract hire or other dealer finance.
Car leasing offers a range of benefits. Here, we look at the latest figures which show three in four drivers are using finance to buy their new car. We also outline three great reasons why you should consider car leasing. Keep reading to find out more…
Almost three in four new cars are bought using car leasing, contract hire or other finance
The latest figures from the Finance & Leasing Association (FLA) show growth of 7 per cent in the number of new cars bought by consumers using dealer finance in November 2013, compared with the same month in 2012.
Almost three quarters of private buyers now use contract hire, car leasing or other finance to purchase their new car.
Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA said: “The consumer new car finance market has reported moderate growth in the last couple of months, with the annual percentage of private new car sales financed by FLA members falling slightly from a peak of 74.5 per cent in August to 74 per cent in November.
“Motor finance providers remain optimistic about growth in 2014, and the FLA’s most recent confidence survey shows that the majority of respondents expect new business growth of up to 10 per cent over the next twelve months.”
Car leasing is becoming ever more popular with motorists. Keep reading to find out three reasons why this is the case…
Three reasons to consider car leasing when buying your next car:
1. Low repayments
When you use a car lease agreement to drive a new vehicle your monthly repayments are based on the expected depreciation of the car over the term of the leasing agreement. This is different to hire purchase, where your payments cover the whole cost of the car.
This means that car leasing can often result in lower repayments than other types of car finance. And, you will often find that the deposit you have to put down is lower. Generally, you will have to put down around 3-6 months payments.
2. You don’t have the hassle of selling your car
At the end of a car leasing agreement you can hand the car back to the leasing company. This leaves you free to start a brand new leasing agreement with a new, modern car.
Because you hand the car back to the leasing company, you don’t have the hassle of selling the car on the open market. You don’t have to worry about advertising it and the hassle of having to show it to potential buyers.
3. You may be able to drive a more expensive model than you thought
As we saw above, the monthly repayments on a car lease can be lower than with other types of finance. This can mean that you are often able to afford a more expensive and upmarket car than you may have expected.
Many drivers use car leasing to drive prestigious brands and models which they would not otherwise be able to afford on a hire purchase plan or on a different type of finance.