How Car Leasing Works

What is Car Leasing? 

Car leasing, or Personal Contract Hire (PCH), works much like a long-term rental. It offers the opportunity to drive a brand-new car without the significant expense of purchasing it outright. The process is simple: you make an initial payment, followed by fixed monthly instalments for the duration of the lease, typically lasting between two and four years. Once the contract ends, you return the car to the leasing company, avoiding the stress of selling and the depreciation concern.

The initial payment usually covers the cost of one, three, six, nine, or twelve months of the lease. Opting for a larger initial payment generally results in lower monthly instalments.

How Does Car Leasing Work?

When you lease a car, you're essentially covering its depreciation during your time of use, along with some additional costs to cover the leasing company’s expenses. The initial payment and monthly instalments are influenced by several factors, such as the length of the contract and your annual mileage, which typically ranges from 5,000 to 30,000 miles.

It’s important to remember that insurance is usually not included in a car lease deal unless it’s specifically advertised as a ‘Total Care’ agreement. The leasing company, which owns the vehicle, will require you to arrange comprehensive insurance to ensure complete protection. Optional maintenance packages are also available for tyres, servicing and MOT. All leased cars come brand new with the manufacturer’s warranty.

What are the steps to lease a car?

The first step is to enquire, after which a leasing consultant will help you find the right car through a qualification process. Once you're happy with the car and the price, we’ll submit a credit application. Once your application is approved, we can proceed with ordering the vehicle. After that, you'll sign the finance paperwork, arrange the delivery, and enjoy your new car!

What should you consider before leasing a car?

Leasing offers several benefits, including lower upfront costs compared to buying, and it can often be more affordable than Hire Purchase (HP) or Personal Contract Purchase (PCP) options. Fixed monthly payments allow easier budgeting while offering flexible terms to suit your needs. Additionally, there are no obligations at the end of the lease, such as selling the vehicle, making the process hassle-free.