In many cases, leasing is absolutely the best way to get a cheaper car.
Let me explain why. For a start, you are only paying for the amount the car depreciates in value, not for the full amount like you would if you bought the car outright, or bought it using HP (hire purchase). However, you can buy a car using a contract called PCP (Personal Contract Purchase)
Leasing also allows you to pay only the amount the car depreciates in value, from the initial price of the car to the resale price. But here is how car leasing can be more affordable that PCP...
To understand how, firstly you'll need to understand how car dealers operate. They agree on contracts with car manufacturers to buy X number of cars. The more cars they agree to, the better deal they get. So, they get the cars whether they can sell every product or not. Just like you or I, they buy the cars on bank credit and, just like us, they need to pay interest on that credit each month until the money is repaid.
So, the longer the car sits there, not being sold, the more the dealer pays. It comes to a point where the car is actually costing them money because they have paid so much interest on the car. During this time, they will try to sell the car, using PCP or HP. But they can’t drop the price too much, because if they do, people will get smart and instead of paying the full amount, they’ll wait until the cars are on discount. Which wouldn’t be good for business. So they offer the cars to us at a discount to achieve a quick sale, in essence ensuring that they stop losing money through interest payments.
They can offer cars to us with discounts because their customers are not buying the car, the finance company is, so nobody is going to "get savvy" and wait for discounts. Those who buy cars will continue to pay full prices like they are now. We get the cars at a lower price, so when we calculate the difference between the purchase price and the estimated resale price, the number is lower, meaning your monthly repayments are lower.
So, car leasing deals are often the best deals you can get. It’s a win-win. The car dealers need to sell the cars that they have a surplus of, and you get great deals. Whereas here at Yes Lease, well, we’re just happy to help.