There was once a time when ownership was everything. Owning things has roots in the British public’s psyche, stretching back to the adage that “an Englishman’s home is his castle”, our status in society having long been determined less by the life we live but more by the things we own.
This attitude undoubtedly included the cars we drove as well as the houses we lived in. Cars were a status symbol of our income, parked proudly outside our homes for all to see.
Keeping up with the Joneses usually meant keeping up with their pay packet – and their savings – so that you could afford to buy a car that looked as good as your neighbour’s parked in the drive next door. After a house, a car is the biggest ticket spend of any product we are likely to make in our lifetime.
Nowadays, ownership around houses is a far-off dream for many and renting property has become the norm for most people under 40. According to the Institute for Fiscal Studies (IFS), in 1995-96 the proportion of 25 to 34-year-olds who owned their home was 65 per cent; in the 20 years to 2015-16 it had plummeted to just 27 per cent.
Caused in the main by a lack of affordability due to high property prices, the new move to renting actually reflects a bigger change in our consumer habits around ownership – in particular the move to fractional ownership – buying things new or used, owning and experiencing them for a period of time and then selling or passing them onto someone else.
Given the ever-increasing costs of raw materials and production, it’s highly unlikely that cars will be moving down in price in the future. Furthermore, government statistics show that many people’s wages have not been keeping up with inflation, making it ever more difficult for the average Brit to afford to buy a brand-new car.
And then there’s the dreaded car depreciation – as a rule of thumb, a new car will depreciate by at least half its value in the first three years of ownership and 60 per cent over the first five years of its life. Even if you sell your car at the end of that term you will still in effect lose most of your money.
Personal car leasing (or personal contract hire as it’s otherwise known) has become a serious option for many these days (about 1.7 million now lease a car personally according to the industry regulator the BVRLA). It makes a lot of sense when you consider all the downsides of buying a new vehicle outright, whilst also locking in your monthly driving costs for the years ahead.
How does car leasing work? When a car leasing company sets up lease deals on new cars it negotiates the most competitive deal on paying just the depreciation costs of the car, not the entire value, which you simply could not match as an individual customer. These discounted costs are then passed onto the consumer, and it is this that makes car leasing such a competitively priced alternative to all other ways of car finance.
Add to that the benefits of leasing a new rather than used car – manufacturer’s warranty, road tax and breakdown cover all come included, with no MOTs to boot – and it gives you the choice of a new car with the latest features and your costs fixed throughout the typical three-year lease period.
Indeed, with car leasing, keeping up with the Joneses may be easier than you think. If they own their home and commit a large amount of their income to a mortgage and are trying to save for a new car, it may be they that are looking enviously out the window at your new leased vehicle parked outside.
Furthermore, when leasing a car, the difference in the monthly cost between, say, a VW Up small hatchback and a spacious VW Passat saloon can be as little as around £100 a month, even though the list price of the Passat is more than double its smaller cousin.
So you may be able to afford a much better car than you anticipated and drive the car that you always dreamt of. Of course, it comes with the agreement you keep the car in reasonable condition and get it serviced on time, but the car leasing companies have insurance and maintenance contracts to cover that too, so that shouldn’t be a problem either.
So before you start taking the traditional route and saving for a new car, take a look at the ever growing worry-free leasing option. Even though you will always be driving a new car, you may never need to own a new car again.
The simplest way to drive a new car
Select Car Leasing is one of the UK's largest independent specialists for car leasing as well as business leasing. They have been providing customers a cost effective, hassle-free way to lease cars and vans for more than 15 years.
Browse their extensive range of car leasing deals here or simply speak to one of their expert leasing consultants on 0118 920 5130.