Car leasing explained simply
In basic terms, leasing a car on business or personal contract hire (PCH) means that you’ll get the keys to a brand new car that you can drive for an agreed number of months/years, covering a capped number of miles, in return for a non-refundable deposit or ‘initial rental’ followed by fixed monthly payments that make motoring a doddle to budget. Keep the car in good condition and within mileage and there won’t be any hidden fees to pay at the end of the lease deal – you’ll simply be able to lease another similar or perhaps totally different model, or just walk away.
The initial rental (non-refundable deposit) can often be varied to suit your pocket, paying more up front resulting in lower monthly payments. Other variables such as the agreed annual mileage, the length of the lease in months and any options specified for a vehicle will also determine the final price. A good credit history or score is usually required to pass the credit check and get your finance application accepted, and ‘in stock’ cars will unsurprisingly be faster to deliver than factory orders.
The initial rental (non-refundable deposit) can often be varied to suit your pocket, paying more up front resulting in lower monthly payments. Other variables such as the agreed annual mileage, the length of the lease in months and any options specified for a vehicle will also determine the final price. A good credit history or score is usually required to pass the credit check and get your finance application accepted, and ‘in stock’ cars will unsurprisingly be faster to deliver than factory orders.
Keeping things simple, customers need to arrange fully comprehensive insurance themselves, but most car lease deals include:
- manufacturer’s warranty, meaning most problems and faults are fixed free of charge
- free nationwide delivery throughout the UK, except Northern Ireland and the isles of Scotland, which may cost a little more
- car tax/road tax/VED or whatever you normally call it
- breakdown, roadside assistance and recovery
You’ll absolutely love leasing if you…
- fancy driving a shiny new car every few years or so - one that is reliable, safe, fuel-efficient and comes with the latest features
- get a warm fuzzy feeling knowing your car is covered by a manufacturer’s warranty and don’t like the thought of used car reliability worries or nail-biting MoT tests hanging over your head
- drive between 5,000 and 25,000ish miles per year, don’t have a weak spot for green-laning off-road and aren’t the type to want your car modified with aftermarket spoilers or a louder exhaust
- hate the way new cars depreciate the moment they’re driven off the forecourt and agree that forking out each month for an asset that loses value doesn’t make sense
- can’t afford to buy a new car outright or afford large monthly loan repayments, and can’t be bothered with the agro of trying to sell a car for a decent price when the time comes to move on
- are someone that likes to deal with easy-to-budget monthly payments with no nasty surprises.
Okay, if you lease a car through PCH you won’t be able to buy it at the end of the contract, prices attract VAT, anyone who goes for an ‘early settlement’ (cancellation, basically) mid-contract will have to pay some of the remaining charges, and fees apply for exceeding the agreed mileage and picking up dents and scuffs, but leasing is otherwise a no-brainer.
