Mistakes Made while setting up A Lease Deal

If you enjoy driving and like to drive a new car every few years at a cost lower than the cost of buying the same, car leasing is the best option for you. However, what seems attractive and profitable at the onset may soon turn into a nightmare if the lease deal is not set up carefully. To steer away from a costly lease agreement, it is important to consider the common mistakes people make during car leasing.

The Common Mistakes

When comparing the quotes from different leasing companies, compare apples to apples. Ensure that the type of car, terms, conditions, taxes, VAT and others are the same across the different contracts. Odds are high that the more attractive looking agreement may not include road tax, repairs, annual mileage etc. What seems like a favorable lease agreement may turn out to be costlier.

• Personal contract hire deals with lower monthly payments seem highly enticing. However, the down payment is hefty in these deals. Making a hefty down payment while purchasing a car is favorable as you are creating equity. As the same is not true in personal contract hire cars, it is advisable to choose monthly payments that are affordable and a lower down payment. In case the car meets with an accident during the lease agreement, you will not lose the hefty amount, as the insurance company mostly does not cover the down payment. They cover only the value of the car.
• Hiring car leasing brokers often seem costlier than dealing with the main dealer. However, this is not always true. As main dealers receive quotes only from the main manufacturer’s finance company, they are rarely the best. Conversely, personal contract hire brokers deal with a host of car leasing and financing companies and thus, find the best and most cost-efficient deal for you.
• Personal contract hire agreements with a lower mileage have lower monthly payments. People are often enticed by these attractive deals. However, they fail to understand that the cost-efficient agreement may bring a nasty surprise at the end of the agreement in the form of excess mileage charged heavily. For cost-efficient personal contract hire cars agreement, an appropriate estimation of the annual mileage proves beneficial.
• Personal contract hire agreements last mostly for a span of three years. People often make the mistake of not including repairs and maintenance in the contract. However, as leasing companies buy these services at wholesale rates, repairs and service charges are cheaper than what it would be when done otherwise. It is therefore, advisable to include repairs and maintenance in the personal contract hire agreement. What’s more, including road tax and maintenance charges in the agreement keep you free from any additional charges in the lease period.
• Another common mistake people make is ignoring the fine print. What if the fine print reads that the road tax included is only for a year?
• It is important to consider early termination charges.

Avoiding these common mistakes will help you get the best and most cost-efficient personal contract hire deal.