Why leasing makes sense
Why do some people lease their cars rather than buy them? The answer is very simple: the cost savings can be huge, especially if you want to change your car every 2 or 3 years.
The best way to demonstrate this is to show you an example. This example compares the financial differences between buying and leasing a new Vauxhall Astra Diesel Sport Hatch 1.9 CDTi SRi 150 3-door.
Buying
| New price of car | £19,705.00 |
| Typical online discount | £3,165.00 |
| Discounted price | £16,540.00 |
| Road tax (year 2) | £120.00 |
| Road tax (year 3) | £120.00 |
| Typical 3-year repayment * | £18,873.36 |
| Sale proceeds ** | £7,675.00 |
| Total cost of motoring | £11,438.36 |
* 'Typical 3-year repayment' based on Lombard Direct rate of 9.1% APR
** 'Sale proceeds' based on used trade value at 36 months old with 30,000 miles on the clock - according to CAP Motor Research data (Mar 09)
Leasing
| Initial payment * | £554.97 |
| 35 subsequent monthly payments * | £184.99 |
| Total rentals | £7,029.62 |
| Total VAT payable @ 17.5% (NB: current VAT rate = 15%) |
£1,230.18 |
| Road tax - included in the monthly payments | £0.00 |
| Total cost of motoring | £8,259.80 |
* Figures are based on our current Contract Hire offer (Mar 09). Length of contract 36 months, mileage 10,000
So, which is better?
You can clearly see that buying the car over 3 years would cost you £11,438.36 - Leasing it would cost you £8,259.80.
So if you were to sell your car at this point, you'd save £3,178.56 - not an insignificant amount of money.
Even if you have the cash in the bank to buy the car without a loan, you'd still save £845.20. And this doesn't include the interest you'd gain if you kept your money in a high interest savings account.
Need more help?
We're a friendly and helpful leasing company - We take the time to find you the best leasing deals that are right for you. Why not contact us for advice on 0845 052 5268 or ask for a leasing quote?
