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5 reasons why leasing a car can beat depreciation

With residuals on the up and the cost of funding staying the same, there’s never been a better time to lease

Motor Mistress Blog

Depreciation is certainly a hot topic these days.

Recently – partly due to a widespread shortage of decent used vehicles – residual values are looking better than ever. This has meant, in turn, that leasing and contract hire prices have become even more competitive in many cases as the cost of funding hasn’t actually changed.

So – is it possible to beat depreciation by leasing a car? Well yes, actually, it is.

5 reasons why leasing a car can beat depreciation

Beating depreciation

If you get a good deal, you may find that by taking out a fixed term contract and simply handing it back at the end, you will pay less than if you bought the vehicle outright in the first instance and then sold it on at the end.

If you can take the “renting” idea out of your head for one minute – i.e. why rent when you can buy? – here are five reasons why it makes good sense to contract hire your vehicle if you get a competitive deal.

5 reasons why leasing a car can beat depreciation

  • Cars do not appreciate; they only go down in value – if you buy, you are only ever taking on a depreciating asset (the outcome of which is never known until you actually sell)
  • Residual values are strong on many cars at the moment; this means that leasing prices are competitive
  • As the cost of funding has remained the same, contract hire prices are currently very keen
  • Manufacturer’s discounts, bonuses and bulk-buy incentives also form part of many deals to make deals even more competitive; when this happens, it usually means that taking out a lease is a lot cheaper than going the ownership route
  • Individuals and small companies do not get the same level of discounts that a large leasing provider can negotiate, which is another reason to take advantage of a great deal when you see one

Fixing the cost of your motoring

As well as beating depreciation, a competitive lease deal will allow you to fix the costs of your motoring. This is especially important to most people and also SMEs as we head out of the recession; nobody wants to find themselves in an unexpected “fix” or have any surprises with their transportation costs.

To go one step further, it is possible to take out a maintenance contract when you lease your vehicle that will almost always work out cheaper than if you maintain the vehicle yourself.

This is because, once again, the funder will have negotiated nationwide discounts with service centres and providers that no single person or company would be able to do and the savings are passed on to the customer.

How to beat depreciation

If you would like to find out more, the best place to start would be to browse the current special offers on Compass Contract Hire’s website. You will find a host of special offers that make my argument quite clear and in addition, you can browse the site for deals on a full portfolio of cars and vans, listed by make and model.

Motor Mistress Blog