How to Lease a Car

12th Jan 2021

How to Lease a Car

“If it appreciates, buy it. If it depreciates, lease it.” These wise words are more relevant than ever in the competitive world of car leasing. For higher value, peace of mind and a better impact on the environment, leasing is by far the best way to go.

What does car leasing in involve?

First things first – you should have a good understanding of exactly what leasing involves before you take the plunge. A car lease is essentially a long-term car rental, where the car is yours for 24 months and up, anywhere up to four years. (Short-term leasing is also available, but it’s far more expensive, and best for business use or trialling a new model.)

Business and personal leasing

It comes in two basic forms – business or personal contract hire. The former is cheaper thanks to VAT reductions, but of course, you need to prove that it will be for business use. Personal leases include road tax, and can be more flexible than business contracts.

What is the car leasing process?

When you sign up with a broker, you’ll get:

• A new vehicle with a warranty

• Maintenance options

• Simple, fixed monthly payments.

Background checks

Your broker will start with a credit check. This will be a short, non-intrusive overview of your employment history, income and expenditure. Business lease deals come with a few more questions, including company details, director information and bank statements.

If you’re concerned that bad credit may harm your application, there are some options available – though they may be more expensive.

Signing the contract

Next, it’s time to agree a contract with your broker. Your lease deal will come with some stipulations, for example a mileage allowance. These are in place because a car depreciates more with every mile on the clock.

You’ll be offered timescales – for example, we offer two, three or four-year contracts – and then you’ll need to pay a deposit.

This deposit is non-refundable as it’s essentially the first monthly payment. The good news is that deposits are usually cheap (around £2-300) and then continue with fixed monthly payments. You can agree smaller monthly payments with your broker if you’re willing to pay a larger deposit.

Maintenance options

Many providers offer maintenance options for extra assurance. These include:

• Free services

• Replacement tyres or batteries

• Reasonable repair costs.

Returning the car

Once your rental period is over, you can hand the car over with nothing else to pay. Of course, you can upgrade to a newer car and start a new contract if you wish. Many people find this to be an affordable option which ensures they have a reliable vehicle at all times, without MOT worries.

What if the car is damaged?

Reputable leasing companies adhere to the BVRLA ‘Fair Wear and Tear’ guide, so there’s no need to worry about cosmetic damage. However, more substantial damage will not be covered by your maintenance package, and you may have to ask your insurer to cover the cost.

What if I’ve gone over the mileage limit?

You will be liable to pay a cost at the broker’s discretion to account for the added depreciation. Finally, remember to return the car with a full tank/fully charged battery!

Get started with leasing today

Looking for a flexible, affordable deal on your dream car? Speak to one our friendly Leasing Consultants here.