Reader TTS

Car leasing is becoming an increasingly popular option in the UK, as the possibility of buying a car seems out of question for a large proportion of motorists.

Last week, Volvo launched its new XC40 SUV alongside a new Care by Volvo monthly subscription service. 

This new package bundles together all the costs associated with owning and running a car into one monthly payment. 

Volvo claims “having a new XC40 will be as hassle-free as having a mobile phone”.

On paper, it seems like Volvo might be right. Unfortunately, it’s much more expensive than a smartphone as well.

The monthly payment for the XC40 SUV is fairly expensive at £629 – and it’s non-negotiable.

Some cars are a lot less expensive to lease. For example, the Suzuki Celerio can be bought from a UK dealer for £79 a month, revealed Sophus3. 

This is cheaper than some monthly contracts for the maxed-out iPhone X.

For example, mobile firm EE is offering the top-of-the-line 256GB version of the iPhone X for £82 per month.

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I would not be surprised to see more cars offered on payment terms below that of mobiles

There are cheaper contracts for the iPhone X available, both with EE and other mobile networks.

Carphone Warehouse is selling the iPhone X for £62.99 a month, with 20GB of 4G allowance and a £179.99 upfront cost.

Sophus3 Managing Director, Scott Gairns  said: “Mobile has converged with mobility.

“This new benchmark in car finance is fuelled by increasingly competitive monthly finance rates, from a growing list of rival finance providers, and the challenge to hit year-end sales

targets. 

“I would not be surprised to see more cars offered on payment terms below that of mobiles before the end of the year.

“In principle, this isn’t necessarily a bad thing. Cars will anyway become part of a monthly mobility model within the unstoppable digital transformation of automotive retail. 

“And at less than £100 per month even more car-buyers will be tempted ‘today’ to buy digitally. 

“But are the car brands ready to engage and transact online with customers in the style of a Vodafone or a Carphone Warehouse?

“Sophus3’s survey shows that the consumers’ experience online can still be confusing, or even off-putting, leading to lost business for the car brands, and their Captive Banks, or consumers

taking out finance without a complete understanding of their commitments.”

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