Not long ago, being a grown-up meant owning a house, a car, and 2.5 children; this might have been the goal 40 years ago, but oh, how times have changed.
Now most young people rent; if millennials manage to get a foot on the housing ladder, they are more likely to be in their early 30s rather than their early 20s. At the risk of sounding like it’s all doom and gloom, the good news is car ownership is no longer a status thing, no longer proof that you have made it.
What’s happening more and more is that savvy folk are leasing vehicles. Car leasing offers are popular for a few reasons (we will expand on that further down), but the most obvious reason is that you can drive a car you couldn’t afford to buy and change it every two to three years for an updated model.
As for 2.5 children, so far, science has not made that possible, although children are expensive, and the chances are you have a child that costs 50% more to run than the other child. There’s nothing we can do about the cost of having children, but we can make your life more enjoyable while you’re doing it.
Declining UK Vehicle Manufacturing Industry and Car Leasing in the UK
Anyone who has investigated the possibility of buying a car knows the cost of new or second-hand vehicles has risen by an average of 25% in the last three years. There are many reasons for the increase; for instance, London has ULEZ (ultra-low emission zone), and the extension to the scheme means anyone living or working within the M25 must have a compliant vehicle.
The theory behind the scheme is understandable, even if the implementation is questionable. The unexpected cost of replacing a car or van has impacted small businesses, increasing the cost of everything, industry and services.
Then there are supply chain issues; we don’t make the amount of cars in the UK as we did 50 years ago. While the UK manufactured just under 220,000 vehicles in the first quarter of this year, that is nothing compared to the UK’s manufacturing heyday of the 70s. In 1972 the UK manufactured 1.92m vehicles.
It’s also true that back in the day, when it was acceptable to wear flares to work, we made the parts and constructed the entire car from bumper to bumper; now, we import most of the elements and call it manufacturing.
What’s more British cars were top brands such as Land Rover, Aston Martin, Bentley, Jaguar and Rolls Royce. Before 2021 you could buy a British-built Honda, but no more; the car plant in Swindon closed, citing the need to reduce production costs.
Will we see more luxury cars on our roads? Probably not. Will DPD start delivering parcels in a Land Rover? Unlikely. Supporting the British car industry has long been the preserve of the rich and famous. Most British luxury cars are exported, which keeps the industry going but doesn’t solve our domestic problems.
So what to do? The answer is to go green, which is the investment in electric (EV) or hybrid vehicles (HEV). While the answer, in theory, is to green up, the practicalities remain a drawback; not enough on-street charging points is a problem, but it’s not the most significant setback.
Evolving technology means electric cars are improving, travelling further on one charge, but what this means for the car driver is uncertainty. If you buy an EV, it will likely be outdated and non-compliant (ULEZ) in a few years.
That’s when leasing becomes the intelligent move. You can change your car every two or three years for the most updated EV, saving money on congestion and emission charges that will almost certainly cover the entire country in the next ten years.
Car Leasing: Why Flexibility Is Key
How we travel has changed, and technology has spurred on invention, and right now, any innovative idea that works is all about convenience. Uber and Bolt lead the way with on-demand local travel, just as UberEats and Deliveroo are about satisfying our need for instant gratification.
The car leasing option feeds into this remit but sustainably (especially if you lease an EV). Leasing a vehicle means you can keep up with the latest technology. Or you can change your mind and choose a different car to accommodate a growing family or downsize as and when your life dictates.
Flexibility means one less thing to worry about. There are no wrong decisions; if you don’t like your choice, you can change it without losing up to 40% of the car’s value the minute you drive it off the forecourt.
Leasing vs Buying: Why More People are Choosing the Former
Leasing a car is another way of renting. You rent the vehicle for a specific time-limited period that You can extend or change depending on your provider.
Within your lease agreement, you can decide how much responsibility you want to take about servicing. For example, you can take an all-inclusive deal which means all costs for the upkeep of the car are included in the lease agreement.
Leasing agreements usually have lower upfront costs and monthly payments, but you don’t own the car. Because you don’t own the vehicle, there are no resale hassles to bog you down.
When you buy a car, you own it; you take the depreciation and the upkeep costs of servicing, MOT and unexpected problems (burst tyes and broken wing mirrors) on the chin.
A pay monthly finance agreement may cost more than your monthly lease payments, but you may retain some equity in the car if you look after it and the vehicle choice fits with current legislation. A car not subject to a finance agreement is considered an asset, but an asset is only an asset if the vehicle has a resale value.
Driving in a big city is not pleasurable; congestion and pollution mean the day of the Sunday drive is long gone. Driving is a practical way to get from A-B, and if you need to make a short occasional journey, Uber or Bolt are probably all you need.
Still, leasing is an excellent option if you need a car to commute or regularly make longer journeys. The key to successful leasing is agreeing to your mileage before you sign the contract. You know how many miles you need to cover in a year, so make sure your contract covers your needs, as renegotiation can be expensive.
Think about car leasing as having a top-of-the-range vehicle with all the benefits without any of the hassle.