Selling your car? Here’s three reasons why leasing could be better for you financially

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If you’ve reached the end of your tether with your current car, and you feel it’s time to upgrade to a fresher model, you don’t have to save for months on end to reach that point – you could go out and get a new car right now. How? More and more people are reaping the rewards of leasing a new car. If this all sounds like news to you though, then read on for our top three reasons why it could save you money in the long term.

  1. Depreciation is reflected in the price

The biggest benefit to leasing over buying has to be the depreciation factor. Simply put, as soon as you buy a car, its value begins to drop. With some vehicles it’s more than others, but in a lot of cases, it makes far more financial sense to lease, because the monthly instalments you make decrease as a reflection of the drop in value. Were you to buy the car on finance though, the amount you pay would remain the same.

If you’ve found a car that you love, it’s well worth doing a check online for the depreciation of the vehicle first to see which option would be better for your wallet. For example, Which? recently conducted a study on several specific models, and found that, while a Volkswagon Scirocco was worth 63% of its original price after three years, a new Ford Mondeo was worth just 36%.

  1. How many miles do you drive?

If you’re looking to lease a car, it is also important to consider how much you drive. For example, if you’ve worked all of your life and commuted, but now you’ve reached retirement and are using the car for personal use only, then leasing is a fantastic option. You may not need a car all the time, so having the ability to lease one for a month or so when you travel to stay with friends or relatives can be hugely convenient.

Most lease agreements can also restrict the number of miles you do, in so much as they will charge you for any extra accrued. So, if you’re driving far less than you used to, leasing is a more financially stable option; you can negotiate the number of miles driven per month, meaning far less costly monthly instalments when compared to loan payments.

  1. It can be claimed as a tax deduction

There are even more benefits if you are an entrepreneur. As a business owner, it’s worth noting that lease instalments can be registered as a tax deduction. Plus, some people may be worried that they will be refused a lease due to a bad credit rating, given the financial checks involved. However, it’s actually easier to get a lease on a new car than it is to get one on finance, so again, it’s far more convenient.

Do you know any other reasons why leasing could help your finances?

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