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Why I don’t recommend leasing vehicles

I spent around 3 years working in the leasing division of a national car dealership chain. My role consisted of a mix of admin duties and delivery driving, so I got to see both the financial/contractual and customer service sides of the business. Whenever friends/family have asked if I’d recommend leasing, I’ve always tried to answer in a balanced way, but never outright recommended that they go down this route. Here are some of the reasons why. Please note, I’m based in the UK so what I’m saying mostly applies to the UK market, the situation may be different in other countries.

MILEAGE

Generally with leasing contracts, you agree a mileage at the outset, and there are charges if you go over this, usually in terms of pence per mile. The reason why this wouldn’t work for me in particular is because until recently, commuting to work involved a 70 mile round trip each day, plus I do a lot of driving around at the weekends. The end result was that I did about 25 to 30,000 miles per year. Lease contracts generally aren’t designed for that kind of mileage, and if you did get one, it would be quite expensive, so it’s not really an option for me.

Beyond the financial aspect, I’d sometimes hear customers say things like ‘I have to be careful with my mileage’. Personally I would feel too restricted if I had to make sure I kept my mileage under a certain amount, otherwise I’d incur charges. I’d be worrying about it and wouldn’t really enjoy having the car. I also feel that if I’m paying a fairly high proportion of my income for a car (the deals were generally over £200/month), I should be able to do what I like, rather than thinking ‘I can’t do this, I can’t do that’ because I’ll get charged more.

‘DAMAGE’ CHARGES

As well as mileage charges, there is also the issue of ‘damage’ to consider. The reason for the quotation marks is that the word damage, in this context, encompasses a wide range of things which they may try to charge for. There is an industry code of practice which all reputable leasing firms follow, however they are still allowed to charge for things such as scuffs over a certain size and alloy kerb rash more than a given length. Not all companies are as strict as the code of practice would suggest and some allow a bit more leeway, however it is still something to be aware of.

In addition, the charges are calculated depends on the company. The one I worked for wasn’t too bad in this regard — they would only charge the customer cost price (the amount it would cost them to fix) plus VAT. I understand some places charge full retail prices, which would be considerably more, potentially hundreds of pounds for a relatively minor repair.

Again it isn’t just a financial issue — if I took on this kind of arrangement, I’d be constantly worrying about any kind of damage to the car, whether real or imagined, and it would make it difficult for me to enjoy driving it. On top of that, they don’t actually have to fix the damage they charge for — ostensibly the charge is to cover the drop in the value of the car, rather than the repair itself. That would really irritate me — if you’re going to charge for damage, at least go ahead and actually fix it.

MAINTENANCE

Servicing and maintenance is often included in a leasing deal but not always. Again, individual providers will probably vary in what they cover, but the place I worked covered servicing and repairs which weren’t the result of accident damage or driver error. The only downside I saw with this was that it could sometimes take a few hours for repairs to be approved by the maintenance department.

It probably isn’t a major issue for most people, but putting myself in the customer’s shoes, I wouldn’t be happy if a company messing about meant the difference between me getting my car back that day vs the day after. Further, I could see some firms being fussy about the ‘driver error’ aspect and trying to wriggle out of paying for repairs that way, although I don’t remember actually coming across this in practice.

OWNERSHIP (OR LACK THEREOF)

With the exception of my current car which was initially on an HP deal, I’ve always owned my cars outright. I don’t like the idea of having a car on basically long-term hire, which is owned by someone else. For people who are used to having a new car on a PCP-type deal every few years, they will already be used to this and it won’t be a problem, but I wouldn’t be keen on it.

Unlike with PCP deals, leasing doesn’t give you the option to make a larger payment at the end and then own the car. Some companies might entertain a discussion, but it certainly isn’t an automatic right, so it isn’t as though you even have the option of becoming the owner. It will vary from person to person as to whether this is an issue or not, but again, it’s not something I would like to sign up to.

SUMMARY

To sum up, I’ve never recommended leasing because of the low mileages offered, the potential mileage and damage charges, and the fact you will never own the car. There are also the maintenance arrangements to consider. For some people, it might be a viable option — new car every 3 years or so, monthly payments, maintenance included etc. It wouldn’t work for me though — so I won’t be recommending it to anyone else either.

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