When you're looking for a new car, leasing can be a flexible, affordable way to a new car but is it right for you?
Do you want to pay the full cost of a new car every 2, 3 or 4 years, and then have to sell or trade in the vehicle? Or do you want to simply pay for the time you use the car, while it's in its best condition and under warranty, and then have the option of driving a brand new car again? And save yourself a great deal of money?
Let's do the calculations for leasing and buying a brand new car - we'll take the popular and economical Vauxhall Corsa Hatchback 1.2 ecoflex exclusiv 5dr
Costs when leasing the car in the UK
- 3 years, 10,000 miles per year. All prices include VAT at 20%
- Initial Payment: £719.93
- Admin Fee: £180.00
- 35 monthly payments of £119.99 = £4,199.58
- Total payable: £5,099.51
- Annual cost: £1,699.84 including annual Road Fund Licence
- Monthly cost: £130.76
- Calculated using data current at 11 December 2013 from First Vehicle Leasing web site
Costs when buying the car in the UK
- 3 years, 0% APR through Vauxhall Finance. All prices include VAT at 20%
- Initial payment: £720
- Vauxhall deposit contribution: £750
- Total Initial Payment: £1470
- 36 monthly payments of £325.14 = £11,705.04
- Total payable £13,175.04
- Annual cost: £4,391.68 excluding annual Road Fund Licence
- Monthly cost: £337.82
- Calculated using data current at 11 December 2013 from Vauxhall web site
Future value estimate: £4,032.60
The estimated future value of a 3-year old Vauxhall Corsa Hatchback 1.2 ecoflex exclusiv 5dr with 30,000 miles is £4,032.60. (Data from Network Leaseplan as at 11 December 2013)
- So you would have paid £13,175 for a vehicle that is now worth £4,000 if you sell it, and perhaps worth less as a trade-in for a new vehicle.
- As opposed to saving £4,042.93, and having the choice of a brand new car?
What are the alternatives to buying?
The alternative to buying is that, with car leasing, at the end of the contract, you can take your choice of another entirely new vehicle, which is likely to have better safety features, better fuel economy, include the latest gadgets and feature the latest design, and again save thousands over the cost of buying outright.
Plus, there is none of the hassle of trading in a car or selling privately. You can also choose a vehicle that suits your current needs - whether it's something a bit sporty, something with more room for a growing family, or as a second car for other family members.