Are you really buying a new car after Brexit?
Achieving certainty of cost is now more important than ever. With the UK exiting the European Union we have been threatened with rising costs and inflation, a reduction in living wages, increased interest rates and a fall in consumer spending. For us as individuals, this means that every decision we make has to be a valuable and thoughtful one…
Taking the decision to procure a new car could be scary prospect for most people – should you really put thousands of pounds towards a depreciating asset when a mortgage could increase or your job could be at risk? Add to that, when you purchase a car, whether a cash purchase or hire purchase, the risk is with you.
If market valuations change and the car is worth less than you thought or, even worse, the car is worth less than your outstanding finance, it is you the customer who will suffer the most.
Contract hire is without doubt the fastest growing, and preferred method to operate a car and van. Contract hire is not a purchase method; you will never own the vehicle. However, is that really such a bad thing when you cannot say with any degree of certainty how much your car will ,or will not, be worth.
Contract hire, or leasing as it is a referred to, is a fixed contract for 2, 3 or 4 years and is based around you paying a monthly rental for the duration of the term. The price you pay per month will be based on the car, your annual mileage, the term and whether you want a driver-maintained or funder-maintained contract (contract hire can include the cost of all servicing, tyres and maintenance if you need it). However, the most crucial thing to note here is that you receive a fixed cost per month, so regardless of how the market changes and develops, your rental will never change (unless the cost of road fund licence changes).
Leasing vs Buying is still a difficult question for many to answer but ultimately the decision you make should be based on accurate information. A dealer cannot promise that your car will be worth a set figure in 2 or 3 years, in the same way we cannot say that contract hire is always going to be beat any other finance method.
You really need to ask yourself what you want to achieve with your car. Are you looking for a fixed cost solution on a new car, with the ability to include maintenance or do you want a cheaper used-car option, with flexibility to sell at any time. These are the types of questions you really must ask yourself before making what is your second biggest purchase decision after your house.
Learn more about car leasing in our help and advice pages or browse for the cheapest, best lease car deals here on our UK website… leave us your comments below on if you will buy or lease a car after the UK leaves the EU.
