In April of 2018, The Independent newspaper ran an article explaining how the cost of a new lease car was due to rise because of the weak pound following the Brexit vote outcome.
At that time, no one could disagree, but as the year has gone on, changes within the industry have brought about some of the best value lease deals ever seen.
Following the vote, yes, the £ weakened but production, planning and manufacture are costed and funded many years in advance, with retail prices being pre-agreed.
It is correct that registrations were falling, but that doesn’t drive prices up. The £ slowly made its way back to beyond Euro1.13, representing less than a 6% fall from the Euro1.20 on vote day. But other factors were coming into play.
The expected interest rises never materialized so money has stayed cheap, helping the planning of 3 and 4 year lease deals. As new car sales have slowed, dealers have reduced servicing costs to fight for business, suppressing the maintenance cost of your new leased car.
The Introduction of WLTP & RDE Testing
As a new set of tests for emissions has been introduced and manufacturers other than those involved in the emissions scandals were coming to the realisation that their vehicles were nowhere near ready for the new tests.
Because, rather than testing in a laboratory, a realistic cycle was developed and cars are now driven further and longer to establish more accurate fuel consumption figures.
The Worldwide harmonised Light vehicles Test Procedure (WLTP) introduces tougher laboratory criteria for fuel economy and CO2 assessments to answer criticism of NEDC.
The WLTP has a more realistic drive cycle than the NEDC, which lasted for just 20 minutes and a total of 11km with strict speed, gear and even temperature controls. Testers will cover over twice the distance to get an official economy figure, while the average speed of the test has risen to 29mph (from 21mph), with a maximum of 81mph attained (up from 75mph).
From September of 2018, all new cars have had to comply with the new tests, but of course that left thousands of existing new cars that didn’t comply. They can all in fact be sold as they were produced prior to the new regime.
It does though mean that their future values are somewhat suppressed, resulting in some fantastic lease deals.
