What is low mileage car leasing?
Interested in car leasing? Everyone’s circumstances and driving habits are personal, from the type of car you drive to the annual mileage you cover. There are people who cover a very low annual mileage, but still like the convenience and reliability of leasing a new car every few years!
What is low mileage car leasing?
The monthly cost of leasing is influenced by the mileage you cover, as the lower the mileage the higher the resale value of the car at the end of the lease. This will be a factor in dictating the monthly cost that you pay.
A low mileage car lease is perfect for motorists who don’t drive too far and tend to make short trips - for example, going to the supermarket, driving your children to and from school, driving to work (if you live nearby), etc. It is important to be as accurate as you can with your estimated annual mileage, as exceeding the agreed contract mileage will incur an excess mileage charge.
That said, the benefit of driving a brand-new car every few years has its own benefits. As a brand-new car, it is likely to be extremely reliable and not let you down on those cold, wintery mornings! The car would also have the assurance of a manufacturer’s warranty, and you also have the option of taking a funder-maintained lease agreement. This means that all of the routine servicing, maintenance, tyres, punctures, batteries, exhausts etc. are also included within the cost of your lease, meaning no unpleasant surprises!
What you need to know about low mileage car leasing …
According to the department for transport, the average distance driven each year in cars in the UK has decreased by 10% when compared to a decade ago. In 2017, cars travelled an average of 7,134 miles, while in 2016 it was 7,250, and 7,334 miles the year before that. In 2007, the distance driven by each car in the UK was 7,712 miles.
With leasing, you can tailor your leasing package around what best suits you, including your annual mileage. This can start from as little as 5,000 miles a year, and increase all the way up to 50,000 miles a year. The monthly cost that you pay is also dependent on the initial rental that you commit to, so the more you pay up front then less you pay per month!
Low mileage car buying Vs low mileage car leasing – Which is better?
Both car buying and car leasing can be suitable, but it depends on which one is best for you and your needs. For instance – if you want to keep the vehicle long-term because of the low mileage, then Hire Purchase (HP) and a Personal Contract Purchase (PCP) may be more suitable, while Contract Hire (CH) is a fixed term agreement, so it would not be a flexible long-term option.
Benefits of a low mileage car lease
A low mileage car lease is typically for drivers who don’t drive frequently and only need their vehicle for short trips. Benefits of low mileage car leasing are as follows;
• Less to pay. Because you don’t drive often and the car retains a higher resale value, you’ll have a lower monthly rental which will enable you to save more money.
• Lower fuel and maintenance costs. Vehicle maintenance is very much dependent on mileage covered and manufacturer timescales. The fact that your vehicle will cover lower annual mileage has a direct relation to a lower maintenance cost for servicing and tyres etc. Whilst this is a benefit for your finances, we would still suggest you consider taking a funder-maintained package and this will give you the re-assurance that you will have no unexpected surprise costs!
• Reliability. Modern cars are extremely reliable, so the peace of mind that comes with a low mileage car under the manufacturer’s warranty is really important.