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Leasing is now easily one of the most popular ways of financing a car. By this point, most people know the basics of how it works – You make monthly payments for a fixed term then choose either to purchase it, or in most cases, hand the car back, meaning you can constantly have a new model without forking out for the full price tag.
With so many personal and business car leasing deals, it’s important to make sure you’re getting one that’s right for you however, so to help you on your way, here are 6 lesser-known facts about leasing a car that you should probably know before you enter into any deal.
1. You can’t use a private garage
With a lot of lease contracts, any necessary servicing and maintenance costs may be covered, giving you peace of mind against unexpected charges in the face of unwanted problems. What many don’t realise however is that the contract will often state that you have to use the main dealer’s garage and not simply your local private one. This is all well and good if you know for sure the dealer has a branch near you, but something worth keeping in mind and being wary of if you don’t.
2. The greener, the better
In a bid to help protect the planet and meet increasingly stricter environmental standards, businesses are very much encouraged to buy or lease cars with lower CO2 emissions, so much so that the government actually permits you to offset some of the cost of the car against tax as capital allowance. In the recent budget however, it was announced that they are reducing the thresholds which will allow vehicles to qualify, emphasising the push towards greener practices and making it a factor well worth considering when choosing which model to opt for.
3. Tyre tread is important
Most people know that contracts can often stipulate a maximum mileage allowance which you cannot exceed without incurring an additional charge, but fewer seem aware of the similar approach to tyre tread, in which it is regularly specified that the car must be returned to the garage with at least 5mm of tread still intact. This is actually 60% more than the minimum legal requirement, and is therefore a good indicator as to the high level of care you are expected to give the vehicle.
4. GAP insurance can be very useful
GAP insurance covers the difference between what is still owed to your lender and the actual value of the car. This means it can save you a lot of money in the event of theft or damage in the early days of your deal, since cars lose the biggest chunk of their value in their first two years. Any disputes between your insurer and the finance company will hopefully be covered by your GAP, sparing you a lot of unwanted hassle.
5. Your credit rating is vital
The state of your credit rating is usually the most important individual factor in determining the deal you can expect to get. For example, advertised deals seen in televised marketing campaigns and such like are often only available to those with the very best ratings, and the worse your score is, the higher the initial down payment is likely to be.
6. You can still haggle
A lot of people assume that because you aren’t buying the car outright (initially, at least), you can’t negotiate on the price. This is simply not the case. It is still equally as important that you shop around for the deal that is right for you and it’s always worth entering negotiations; if a dealer knows you are willing to take your business elsewhere, some will offer to reduce the monthly payments or even waive the deposit in some cases. If you don’t ask, you don’t get.
from Finance Girl http://www.financegirl.co.uk/six-things-you-didnt-know-about-car-leasing/
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