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Leasing Hub

If you're new to leasing & want to learn about the process, Leasing Options' comprehensive guide has everything you need to know about first-time car leasing

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    What is leasing a car?

    Personal car leasing or contract hire essentially means you 'rent' a brand-new vehicle, making fixed monthly payments for a set period with an agreed mileage. Then, when your contract ends, you return the car.

    Leasing a car is an incredibly popular choice for people looking for a new car as it's a cost-effective way of driving a new vehicle every few years. With no large deposit required and fixed monthly payments, it is an affordable alternative to purchasing on finance or buying a car.

    How does car leasing work?

    In essence, leasing means you can use a specific vehicle for a fixed period for an agreed sum of money, which is paid back in monthly instalments.

    To answer the common question “what is leasing”, it's an agreement where you can use a specific vehicle for a fixed period. This involves an agreed sum of money which is then paid back in monthly instalments.

    Car leasing is a similar concept to renting a car, however, instead of using it for a few days, you agree to a term typically between two and four years. When applying for a car leasing agreement, your credit score will be considered to ensure affordability and eligibility checks are met like ensuring you’re over 18. However, leasing a car with lower credit rankings is still possible.

    There's also no need to worry about increasing costs or interest hikes. Monthly payments are fixed, and once the contract is up, you hand the keys back to the finance company. Easy!

    Cost of leasing a car

    Leasing a car is an affordable way to drive the latest models. Upon starting the agreement, an initial payment is made, which is a choice between one and 12 months instalments. This isn’t a deposit. Instead, the first payment is deducted from the total contract agreement cost.

    The more you pay, the less your remaining monthly instalments will be – making it super flexible depending on your budget. The remaining instalments are paid over the rest of the agreed term.

    Find out more in our guide to the cost of leasing a car

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    How does car leasing differ from buying a car?

    There are a few key differences between leasing and buying cars and it's important that you're aware of them so that you can pick the correct one for you.

    When it comes to leasing, you don't need to pay a large upfront cost, whereas when buying a car outright you do. Payment for leased vehicles is also spread out over long periods of time, but unlike with buying a car, you won't have ownership.

    When leasing, you won't have to worry about the value of the car depreciating over time as once your lease ends the car is returned. This also means that you have the option to change your car more regularly and that you aren't stuck with the same one for long periods of time. When buying a car, however, you need to consider that the vehicle's value will depreciate. This means that when it comes to selling, you won't be able to receive the same price you paid.

    Leased cars can also have mileage limits applied too, which isn't the case for when purchasing a car outright. If you're interested in learning more about how car leasing differs from buying a car, have a read of our guide on whether you should lease or buy a car.

    Six-step car leasing process

    Leasing Options has six simple steps to make it easy for our customers to lease a car.

    What's included in a car lease?

    In addition to driving a brand-new vehicle, your car lease has a range of extras included within the monthly cost. This includes:
    • Free delivery to your door (UK mainland addresses)
    • Road tax - worth up to £3,000
    • Registration fee - worth up to £55
    • UK manufacturer's warranty
    • 12-month breakdown assistance
    • Assisting with selling your old car
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    Car lease eligibility and finance

    When you choose to lease a car, there are several eligibility and financial checks carried out to ensure you can meet the monthly instalments.
    A credit check is performed by the finance company, which determines the outcome based on several factors. If you're unsure what your credit score is, for example, credit reference bureaus such as Experian provide this information.Higher credit scores are more favourable when applying for a car lease. However, isn't impossible. You can use an eligibility checker to determine whether a lease deal suits your circumstances.If you're part of a corporation looking to lease a vehicle, you may be interested in looking at our business car leasing deals instead.At Leasing Options, we work with several finance companies to bring customers the best possible deals on finance for a new lease car. So, chat with the team for more information.If you want to know more, check out our guide to car leasing eligibility.

    What do I need to lease a car?

    You'll need a few things to hand when you start the car leasing process. These form part of your eligibility and financial checks.
    What you need to lease a car:

    How does car leasing compare to other finance options?

    Weighing up the pros and cons of leasing a car vs buying one is always a good idea when searching for your next vehicle. Each has its benefits and drawbacks, including the comparison between leasing, PCP and other car finance options.

    Comparing each can help you make the best choice for your circumstances and lifestyle. Leasing contracts differ from financing a vehicle using PCP, HP or bank loans. Some of the main differences include the following:

    • PCP includes a larger balloon payment at the end
    • PCP and HP require a deposit
    • HP doesn't have mileage caps or excesses for wear and tear
    • HP and bank loan funding means you own the vehicle outright

    Find out more in our guide to the differences between PCP and leasing.

    So, take a look at what's included in each common leasing and buying option below:

    Leasing vs financing

    Leasing contracts differ from financing a vehicle using PCP, HP or bank loans. Some of the main differences include the following:

    • PCP includes a larger balloon payment at the end
    • PCP and HP require a deposit
    • HP doesn't have mileage caps or excesses for wear and tear
    • HP and bank loan funding means you own the vehicle outright

    Find out more in our guide to the differences between PCP and leasing

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    PCP or HP?

    Six key benefits of car leasing

    Considering a new car lease? Check out six benefits that make this option a great choice.

    Find out why leasing could be right for you in our guide to leasing benefits and considerations.

    Car lease maintenance and insurance

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    Leasing with insurance or a maintenance package can save you time, money and hassle whilst giving you fixed cost motoring all in one place.

    End of a lease and renewals

    Unlike other finance agreements, leasing contracts require an individual to return the vehicle to the leasing company. At this point, you can choose a renewal lease (picking your next car) or the end of the contract.

    In most circumstances, returning the lease car is standard procedure, as you don't own it at the end of the agreement.

    However, there may be an option of buying a car at the end of the lease (otherwise known as a lease purchase). To explore this option, chat with your account manager.

    If you want to know more, head over to our end-of-lease and renewals guide.

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    Six tips for first-time car leasing

    Leasing a car for the first time? Check out our handy tips to make the process easy.

    Leasing frequently asked questions

    Below, you'll find some of the most common leasing FAQs. If you can't find the answer to your question, please contact us to discuss your car lease.

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    Ready to lease your next vehicle?

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    Working in Partnership

    We work with a number of finance companies including: ALD Automotive, ARVAL, Alphabet, Novuna Vehicle Solutions, Lex Autolease, LeasePlan and Santander. We are also a full member of the BVRLA and are in constant discussion with both manufacturers and finance companies to get the best possible deals for our customers.

    We also pride ourselves on being industry leaders and are willing to share our expertise with national and regional media to help educate people on all aspects of leasing.

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