Is Car Leasing Still A Good Idea In 2023?

Car leasing has been an extremely popular solution for the past 20 years to finance your brand-new vehicle over a long-term duration. But is it still a good idea in 2023?

Is Car Leasing a Good Idea? Pros, Cons, and Risks Explained

Car leasing has become an increasingly popular option for those looking to drive a new car without the long-term commitment of ownership. With lower monthly payments and the ability to drive a new car every few years, it's easy to see why car leasing has its appeal.

However, before you decide to lease a car, it's important to weigh the pros and cons and understand the risks involved. In this article, we'll explore whether car leasing is a good idea in 2023 by answering common questions and addressing important considerations.

What Is Car Leasing?

Car leasing is essentially renting a car for a fixed period of time, usually two, three or four years. When you lease a car, you pay a monthly fee that covers the depreciation of the car during the lease term, plus interest and fees. At the end of the lease, you can choose to return the car or speak to the finance company with regards to purchasing the vehicle (this is down to their discretion).

Benefits of Car Leasing

There are several benefits to leasing a car, including:

1. Lower Monthly Payments

Leasing a car typically results in lower monthly payments than financing a car purchase. This is because you're only paying for the depreciation of the car during the lease term, rather than the entire purchase price.

2. No Hassle Resale

With a lease, you don't have to worry about selling the car at the end of the lease term. You simply return the car to the leasing company and walk away.

3. New Cars More Often

Leasing a car allows you to drive a new car every few years, without the commitment of ownership. This can be especially appealing if you like to stay up-to-date with the latest car models and features.

4. Lower Repair Costs

Most leased cars are covered by a manufacturer's warranty, so you won't have to pay for most repairs during the lease term. This can save you money compared to owning a car that's no longer under warranty.

5. Lower Upfront Costs

Leasing a car typically requires lower upfront costs than financing a car purchase. This can be especially beneficial if you don't have a large down payment available.

Disadvantages of Car Leasing

Despite the benefits, there are also some disadvantages to leasing a car which should be taken into consideration when weighing leasing as a possible option. These disadvantages include:

1. Mileage Limitations

Leased cars typically come with mileage limitations, and exceeding those limits can result in fees at the end of the lease term. If you drive a lot, have a long commute or have irregular per-annum mileage, leasing may not be the best option for you.

2. Additional Costs

In addition to the monthly lease payments, there may be other costs associated with leasing a car, such as acquisition fees, disposition fees and early termination fees if you want to end your contract early.

3. No Ownership

When you lease a car, you don't own it. This means you can't make any modifications to the car or sell it without the leasing company's permission.

Risks of Car Leasing

There are also some risks to consider when leasing a car, including:

1. Wear and Tear

Leased cars are expected to be returned in good condition, and any excessive wear and tear may result in costly fees at the end of the lease term. This can include anything from scratches and dents to worn tires and interior damage.

2. Boredom with your Current Car

Some people prefer to change their car fairly often and are tied into a lease contract that lasts anything from two to three or four years. This means they could get bored with their car midway through the contract.

Is Leasing Better Than Buying a Car?

Whether leasing is better than buying a car depends on your personal circumstances and priorities. Leasing can be a good option if you prefer lower monthly payments and the ability to drive a new car every few years, without the hassle of selling or trading in your old car.

However, if you prefer to own your car outright and want to avoid mileage limitations and other admin fees, buying a car may be the better option.

Is Leasing Better Than PCP (Personal Contract Purchase)?

Personal Contract Purchase (PCP) is a similar option to car leasing, but with the option to buy the car at the end of the term for a predetermined price, also called the 'balloon payment'. Whether PCP or leasing is better for you depends on your priorities and financial situation.

PCP may be a better option if you want to eventually own the car, while leasing may be a better option if you prefer lower monthly payments and the ability to drive a new car every few years.

If you have no interest in buying the car at the end of the contract then leasing would be a better option.

Do You Lose Money When You Lease a Car?

You don't necessarily lose money when you lease a car, but it's important to understand the costs and fees involved. When you lease a car, you're essentially paying for the depreciation of the car during the lease term, plus interest and fees.

At the end of the lease term, you can choose to return the car or buy it outright (this is down to the finance company's discretion and then can deny a purchase). If you choose to return the car, you may be subject to mileage and wear and tear fees.

Sidenote: Business Contract Hire 

Business Contract Hire is similar to personal car leasing, but it's specifically designed for businesses. With Business Contract Hire, a business can lease a car or fleet of cars for a set period of time, with the option to purchase the cars at the end of the lease term. Business Contract Hire can be a good option for businesses that want to avoid the hassle of owning and maintaining a fleet of cars.

Conclusion - Is Car Leasing Still A Good Idea In 2023?

Car leasing can be a good option for those who want to drive a new car every few years without the commitment of ownership. However, it's important to weigh the pros and cons and understand the risks involved before making a decision.

Leasing may be a good option for those who prioritize lower monthly payments and hassle-free driving, but it may not be the best option for everyone. If you're considering car leasing, be sure to compare your options and choose the option that best fits your needs and priorities.

Want to lease a brand-new car now?

Stable Vehicle Contracts are a leading leasing company that has been leasing cars since 2009. We have supplied tens of thousands of cars to people across the UK and offer free delivery straight to your doorstep.

If you are interested in leasing a vehicle from us, visit our Car Lease Special Offers page to see our current fantastic deals. Alternatively, if you want a vehicle within two weeks, you can visit our In Stock Car Lease Deals page to see what we have available in stock.

Whether you're after an SUV, Coupe, Hatchback, Estate, MPV or Saloon, we have everything that suits your taste. We also lease performance cars, as well as electric cars, electric vans and hybrid cars.

If you want to know more about car leasing, you can visit our Car Leasing Guides page to find out more information.

And finally, we have over 1,100 verified reviews (at the time of this article being written) which can be viewed here. A verified review can only be added once a customer has had their vehicle delivered, therefore our reviews are a 100% customer experience of the Stable brand.