New year, new car - should you update your lease?

Posted on Monday, March 20, 2017 - 10:35

Over the course of just one year, February 2015-2016, 96.443 new car registrations were recorded in the Australian market. The number was released by the FCA and appeared in an article in caradvice.com.au; this serves as proof that cars are of utmost importance in Australia. The number of leased cars is steadily growing from year to year. Many lessors have offers meant to make you stay for another lease term.

What are those lease offers?

They are called “lease pull-ahead” offers and what they do is that they allow you to update/ upgrade to a newer model and decrease your monthly fees concomitantly. “But why would they do something like that?” you may ask and although it looks like the answer would be very complicated, it is not. By doing that, dealers increase the loyalty of their brands and get rid of slowly selling models. In other words, they keep their customers satisfied, and thus they ensure their survival.

Before going headfirst into such a luring update, you must take into consideration all of the following aspects:

Read the Terms and Conditions with maximum precaution

You must make sure you understood everything that’s written in there. You may be in for some very unpleasant surprises if you don’t. So, make an informed decision.

You are not compelled to do it

Nobody can force you to get into a new car that you don’t like. If you are happy with the model you currently own, that’s perfectly fine.

Check the mileage in the contract

If the newer model has less mileage than the one you own now, it is probably not a good idea to update. The car may look gorgeous, but that does not compensate for its short mileage.

Check the remaining time on your lease

If you find yourself in the last year, that’s the perfect call for you to take your chances on the lease pull-ahead deal.

Research the buyout – trade-in price report

It goes without saying that if the trade-in price is higher than the buyout one, you have more equity. That will help you get better terms on the new car.

Discuss it with a financial advisor

If the enquiries of the financial advisor are positive, you can go for it without any problem. But if he/she doesn’t approve of the idea, that should be some food for thought.

This sort of offers is gaining a lot of ground from year to year. One thing is exceptionally clear: they are incredibly tempting. They are by no means scams, but some research is due before you accept any of them, especially when fees are involved. Fundamentally, the pull-ahead lease offer is meant to fortify both your provider as a brand and you as a lessee. It is clearly a win-win situation, and there is nothing wrong with that.

Did your lessor ever propose you such an offer? Would you accept it if he did?

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