You have just passed your driving test and are looking forward to driving your own car. Hand-me-downs don’t excite you, nor are you interested in sharing a car with your siblings.
Owning a car seems the only option, but you don’t have a lot saved up. Well, you are in luck as you can easily lease your dream car. But how do you go about it? What do you need to make this dream a reality?
Find out now.
How Young a Driver Can Lease a Car?
A lease is a contractual agreement, so you must be old enough to enter into a contract, usually 18 years old. Any younger and you would need to wait before you can lease out your dream car.
However, you can use whatever time you have till your 18th to familiarise yourself with the ins and outs of leasing and also decide which car you want to lease.
You Are Not Alone
It feels good to go to the dealership, pay cash and drive out with your chosen car. But let’s face it, many of us don’t have that type of money sitting around as young drivers.
Besides that, statistics show that most drivers between 18 and 24 prefer to lease a car than buy it outright.
Let’s find out why.
Why You Should Lease a Car
The following are some reasons why you should consider leasing over buying a vehicle outright.
1. Leasing Gives You Options
One reason you should lease your first vehicle is the number of options it gives you. You can compare different leasing packages on websites like https://www.leaseloco.com/.
Comparing packages allows you to figure out what you want in your contract. It allows you to do your due diligence, so you enter into a contract that protects your interests.
2. Leasing Is Pocket Friendly
Arguably the most important reason to lease a car instead of buying it is that it saves you money. How much you will be saving depends on your agreement with your lessor.
Also, leasing a car allows you to ease into the payment instead of paying a lump sum that could negatively affect your cash flow.
What Does the Lease Cover?
Below are some payments covered by your lease.
This is optional and does not come with all basic lease arrangements. However, most cars under a lease are still under warranty by the manufacturer, who would repair the vehicle in approved locations at no extra cost.
2. Road Tax
You would have to worry about road tax if you bought a car outright. However, with a lease, you already have the road tax as part of your monthly payments. The payment would be made on your behalf by the lessor.
Car insurance is not standard in most lease agreements. However, you can modify some contracts to feature some type of insurance.
Do You Need a Guarantor?
You will need a guarantor if you have poor or no finance records or credit history. It would be challenging to get a lease deal as you can not prove you can make the monthly payments. Under this condition, you might be required to present a guarantor if you default on payments.
The guarantor can be your parent, relative or adult at least aged 21 with proven credit history. You can’t have your spouse be your guarantor or any other person linked to you financially.
Alternatively, you can lease your vehicle without a guarantor if you can prove without doubt your ability to follow through with your monthly payments. It is advisable to take time to build your credit score before leasing a vehicle.
What Determines the Cost of the Lease?
1. Length of the Contract
A major determinant of your lease cost is the length of the lease. Longer leases would cost more than shorter leases. But your monthly payments might be less for longer leases as the total amount is more spread out.
2. Make, Model and Trim of the Car
Recent models, high-end trims and classier car brands would cost more to lease than older cars or less luxurious vehicles. For example, it would be cheaper to lease a Toyota than a Mercedes.
3. Initial Payment
The more your initial payment, the less you would need to pay monthly. Paying a large lump sum upfront significantly reduces what is left to be paid during the lease.
Leasing is the better option for young drivers looking to drive their first car. It affords more options, and it is a straightforward process that does not put a strain on your finances.