Car Leasing: Our money saving tips
Financing a new car can be a minefield with so many options to choose from. However, whether you decide on car leasing (also known as 'contract car hire') or a loan, hire purchase or personal contract purchase there is one common denominator - we all want to save money. That is why we have compiled the moneysupermarket.com car finance money saving tips to help you save as much cash as possible.
How to save money on car leasing
- Ensure you choose the right option - The guide to car finance will explain the range of options available to you. Generally it is best to pay by cash if you have the money available. However, for most this is not an option. For long-term borrowing where you want to own the car at the end consider a car loan. Car leasing can be the ideal solution for those who are happy to hand the car back at the end of the term. Read the car leasing guide for more details on the options available. Ultimately this decision will help you save the most money, as it will determine your monthly payments.
- Shop around - Some providers will offer you a better deal on particular types of car if you are adamant about the type of vehicle you want. Of course the more flexibility you have, the better your chance of securing a cheaper deal.
- Make the most of the internet - As with most products, you can secure better deals online. If you take advantage of comparison tools, such as the car leasing comparison tool at moneysupermarket.com, you can compare the market in seconds to ensure you're getting the best available offer.
- Emphasis on APR - As with any finance agreement check the APR that is being charged to you. Securing a good APR will allow you to make a considerable saving.
- Think carefully about your selected mileage - If you don't allow for enough annual miles over your term you could find yourself heavily penalised in excess mile charges. Likewise if you over estimate and are under then you could have paid more out on a monthly basis than necessary as your monthly payment and final value is calculated on your annual mileage. Make your calculation as accurate as possible.
- Consider whether you want to include servicing as part of your package - It may be if you're a high mileage driver it could be in your interest to have all tyres, servicing, etc, accounted for by means of an additional monthly payment. However, if you only do short trips it may be more cost effective to fund the annual service yourself and any additional ad-hoc bills.
- Is tax included - Look at whether your package includes tax or not. Some will include it for the term of your agreement but check how much you are being charged for this.
- Maintaining your car - It is vital to make thorough inspections of your vehicle to ensure it is maintained correctly. If you have a car leasing policy and attempt to return the vehicle with damage you could pay excessively. For example, a small scuff on the bumper could leave you paying out the full cost of repair at a body shop. If your car has damage that needs repairing, it is often better to pay the cost of repair yourself than pay out the additional penalty charges from the car leasing company. Make thorough checks before returning the vehicle.
- Ending the agreement - If you wish to end the contract agreement early, see if the penalty charge will outweigh the interest and monthly payments until the end of the agreement. It might be more profitable to end the agreement, or it could make sense to wait.
- Your own sale - If you have a personal contract purchase policy and you do not want to keep the vehicle, do not automatically hand it back to the provider. Instead consider selling it independently. If you can sell the car for more than the guaranteed value, you can keep the profits.
If you use these easy-to-follow tips you can make crucial savings and ensure you're on the right road to the best car finance deals.