Depreciation – what exactly is it and how can leasing a car avoid it?
Depreciation is quite simply put the difference between the amount you spend when you buy a car and the amount you get back when you sell or trade it in.
For example if you were to buy a brand new Range Rover Evoque you’re looking at a price of around £50,000 – sell it after three years and you can expect a figure of around £32,000 (depending on condition, mileage, specification etc.)
The Evoque is a car that commands pretty good resale value – for some vehicles they can lose up to 70 or 80% of their new price in three years.
According to stats for the AA a new car loses value as soon as you drive off the forecourt and by the end of the first year will have lost around 40% of its value. By year three, if you drive 10,000 miles a year, the average car will have lost around 60% of its value!
For many people though, driving a brand new car that has zero miles on the clock and that ‘new car smell’ is essential. We agree! There’s nothing quite like brand new, but you don’t need to face losing thousands of pounds to get that feeling.
This is where leasing comes in.
Currently only around 10% of cars on the UK’s roads are leased by individuals so that means 90% of you are missing out on the benefits and not having to worry about depreciation is one of them!
Of course you won’t own your leased car but it will be brand new when it’s delivered, it will be yours for three years and after this time you can simply hand it back and start all over again, leasing another brand new car.
Once you’ve chosen the make and model that suits your lifestyle, and your purse strings, you make an initial payment (usually the equivalent of 3 or 6 monthly payments) plus a standard admin fee and then monthly payments are spread over the term of your contract. No hidden extras, no worries about depreciation just a fantastic brand new car for you to enjoy.
We hope we’ve made you curious to find out more – so why not take a look at our deals today www.ovl.co.uk