Hidden costs of car leasing: what Ukrainians should pay attention to.

What is car leasing?

If you want to drive a new car without spending a fortune on purchasing it, leasing may be the best option. Car leasing is essentially a long-term rental agreement lasting from two to four years, for which you pay the supplier monthly for the use of the car. According to BVRLA, British roads have around 1.9 million leased cars.

If you’re planning on leasing a car, there are some potential added costs you need to be aware of

'Leasing a car can provide you with flexibility, lower monthly payments, and the opportunity to get behind the wheel of a new model without worrying about resale,' explains Ian Reid, a Carwow expert. 'This is especially convenient for those who prefer clear expenses and do not want to worry about depreciation.'

Avoid VAT

When leasing a car for personal use, you will have to pay VAT in addition to the monthly payments – which is charged at a rate of 20%. 'Don’t forget to check if VAT is included in the price being offered to you, as it is not always accounted for,' notes Mr. Reid. 'VAT can increase a car from £300 per month to £360 per month - that’s already a significant difference!' You will also be required to pay an administrative fee, which is usually around £300, to cover paperwork and forms.

Avoiding fines

There’s nothing more unpleasant than approaching your car and seeing a yellow parking fine notice glaring at you from the opposite windshield. However, when leasing a car, you may be able to avoid paying the fine completely – or at least pay only £80. Additionally, you’ll need to pay an administrative fee to the leasing company, which will cover the fine amount. Some companies may charge up to £60 for the administrative fee in case of a fine. In real terms, car leasing may hide many nuances that can affect your budget. From VAT to administrative costs and fines – every detail is worth attention to avoid unexpected expenses.