Are Car Leasing Deals Good Value?

You usually purchase your car outright, or maybe you might take out a HP agreement. But you keep seeing and hearing about personal leasing and need to know; Are car leasing deals good value?

Choosing a personal leasing deal can look like an attractive offer, and in many cases they can offer value that appears hard to beat. CVM’s iLease personal leasing product offers Car Leasing Deals that take advantage of our relationships with all the UK manufacturers allowing us to secure significant discounts on new cars, and low finance interest rates that ensure that your monthly payments are as low as possible. But that doesn’t really answer the question. Are car leasing deals good value?

An example, you have had your radio on in the car and heard offers with monthly payments that seem almost too good to be true. How can I lease such an expensive car for such a small monthly payment? The answer is often in the terms and conditions. That’s the bit that gets said at a million miles an hour at the end of the advert.

A car lease is a lot like a balloon. If you squeeze it in one place, it will generally get bigger in another!

Are car leasing deals good value?

When you squeeze a balloon the air has to go somewhere!

 

Looking at the image above, the middle part of the balloon can be seen as your monthly payment. As you squeeze this payment smaller and smaller, the rest of the balloon gets bigger. Because you will never own the car you don’t need to worry about the final payment (anything to the right of the squeezed part). However the balloon to the left is getting a lot bigger, this is your initial depositĀ and this is something you need to be aware of when you compare leasing offers. The important thing to remember is, you never own the car, so the cost of your lease consists of all your monthly payments and the cost of your initial rental, therefore the larger the balloon at the end of the contract the more cost effective to you.

Compare this with a typical iLease payment profile. As you can see, the initial payment and the regular payments are the same. The large section of balloon will remain the same size, but you never have to pay this, so don’t need to take this into consideration.

 

Back to the original question; Are car leasing deals good value?

The answer is yes, but you as the customer need to pay attention to the detail. When drivers compare deals remember to take the initial payments into account, and calculate your total repayable over the term. CVM’s personal leasing product iLease shows all leasing deals based on just 1 initial payment profile, with a term and mileage profile which can beĀ amended to suit your personal circumstances.

 

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