Car leasing with bad credit history is already possible these days, and given the current economic situation, it might actually be a better option that saving up for a car and buying one of your own. Not only is it a more affordable option, but you would not have to be tied up to it for a long period of time unlike with paying off a car. Not to mention that when you own a car, even after you already paid for it in full, you would already have a depreciated in value piece of asset but at the same time, incur more expenses for it in the long run. There are more reasons why leasing a car with a bad credit history is better than owning one – this most especially holds a truer reason if you are a bad credit score holder.
Lease vs Loan
If you have a bad credit history, it would be really hard for you to actually apply for a loan to buy your very own car. If you do get approved for a loan, it is only because you must have applied with a guarantor. But not even that could guarantee that you would not get ludicrously high interest rates on top of your loaned value – because of your bad credit history, you most likely will. Meaning to say, if you loan for a £15,000 car, a person with a good credit history might get smaller monthly repayments compared to you if you have a bad credit score. Most loans are paid up for a year if you have a big monthly repayment budget, or as long as five years if you want the value to be more spread out into more affordable payments. Whereas with leasing, you would only have a lease term of as short as a year to as long as three years. Even if it is a shorter time compared to a loan repayment, you would not have to pay double or triple the amount of monthly loan repayments, because you would only have to pay for the depreciation value of the car while you are using it in the term of your lease, unlike with paying for the whole value of the car when you opt to buy it in your name.
The Expenses End When Your Lease Term Ends
When you buy a car, you have monthly loan repayments on top of the monthly expenses you would encounter in relation to the use and the wear and tear of your car. These monthly expenses does not end as soon as your loan repayment is done. In fact, it could even bloat in value throughout the years because it might have more frequent breakdowns, which is typical for cars that are already worn out and used. Did you know that the average monthly spend of people for their cars round up to around £200? This is inclusive of fuel expenses, car insurance, routine servicing or maintenance, unexpected breakdowns and repairs, cleaning, and not mention the expenses for parking tickets, permits and even fines. Some of these expenses are unavoidable and even recurring constantly. With a car lease, however, the expenses stop as soon as your lease term expires because you would not have any asset to take care of after. Most (if not all) leased cars are actually brand new with a manufacturer’s warranty still intact. So, most people with leased cars only have minimal monthly costs relating to the use of cars.
Not Getting Stuck with One Single Car
When you buy a car of your own, you would be stuck with that car, make and model, for roughly around 5 to 10 years, sometimes even longer. When you want a brand-new car, you would have to go through the hassle of reselling your already used and beat down car – should anyone be interested in buying it from you, before you could buy a new car. This holds most especially true for people with families where expenses for brand new cars are not really a priority because of other living expenses that need to be prioritized. On the other hand, when you opt to lease out a car, you would get a brand new car for one to three years tops. If you happen to like that make and model, you could go for it again should you want to renew your lease. But if you want to test out other car makes and models, you have the luxury to do so by just applying for another lease. The whole beauty of it is that you do not even have to go through the hardships and hassles of finding another lessee to lease out the car you already used. Once your term lease ends, the car is already off of your hands and you are ready to drive another brand new car in style once again.