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How Leasing Works

How does car leasing work?

With a car lease you are paying for the use of that car for a set period of time; typically, 2, 3 or 4 years. You are paying for the depreciation only of the vehicle, thus getting the right lease deal can mean you can drive a much more expensive car for your budget than other methods of funding.

How Vehicle Residuals Effect Lease Payments

When you lease a new vehicle, you’re “buying” the vehicle’s depreciation (the left section).

When the residual value is high, you “buy” a smaller chunk of the car.

If the residual value is low, you have to buy a bigger portion of the car and that makes your lease payment higher.

Taking a car lease helps you avoid any unexpected costs by having a fixed monthly cost for the duration of the lease. You don’t have to worry about depreciation or selling the car as the finance company has responsibility for this. By adding an optional maintenance package on, any servicing costs and replacement tyres can also be covered,

The length of contract you choose can be down to how long you want to take the car for or sometimes can be due to there being a special offer on a particular length of contract (sometimes 2 year deals may work much cheaper than 3 years for instance due to the large discount on the vehicle being divided by a shorter timeframe)

How are car leasing deals structured?

Most car leasing deals consist of an ‘initial rental’ and a set series of monthly repayments. The initial rental refers to how much you’ll pay up front (usually after delivery) and is usually three, six or nine times the monthly payment amount. Car leasing deals are usually referred to by the size of the initial rental and the number of subsequent monthly payments. For example, a 6 + 35 agreement requires an initial rental amount equal to six monthly payments, after which you’ll pay a set monthly payment amount every month for the next 35 months. The total length of a 6 + 35 deal is 36 months (three years). A 9+23 would therefore be an initial rental of 9 payments followed by 23 monthly payments. There is usually a processing fee to be paid just after ordering.

How does the process work?

Do I own a leased car?

No – the finance company buy the car and own it

As such, it’s quite similar to renting a house – you have sole use of it, but it’s still owned by the landlord at all times. If you want to change your car every few years and have a security of a new car under full warranty then leasing could be for you. If you want to own a car outright and run it for a long time then leasing isn’t really for you.

Not owning your leased car means you won’t have to worry about the hassle of selling it on, or how much it may have lost in value (depreciated) in the time you’ve been driving it. Our lease offers are on new cars only (some are pre registered but are brand new). As such they are all covered by the manufacturer’s warranty, meaning you won’t have to pay to fix any unforeseen issues.

How do I insure a leased car?

Just the same way you would for a car you owned outright. On the bulk of our offers we can’t factor it in to the rental so you will need to arrange fully comprehensive insurance. When insuring, you have to put the finance company as owner and keeper of the car. Sometimes as the car is brand new, the registration number won’t show on their database so you will have to give them make and model and explain it is brand new in order to get a quote.

Are there any downsides to leasing a car?

Car leases can be expensive to get out of if your circumstance change- there will be a settlement based around the number of rentals left. You should always consider if you can keep up repayments if your circumstances were to change.

Check our other informative pages:

Guide to personal leasing
Guide to Business leasing
FAQ’s
Maintenance explained

A selection of our latest offers

Special Offer

BMW

5 Series Saloon 520d 2.0 Mht M Sport Pro Auto
BMW 5 Series Saloon image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,960.39
£328.93pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £2,466.99
£274.11pm
View Deal
Special Offer

SEAT

Ateca Suv 1.0 TSI 115ps SE Technology Ecomotive EZ
SEAT Ateca Suv image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,938.17
£215.35pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,615.14
£179.46pm
View Deal
Special Offer

Toyota

Corolla Hatch 1.8 Hybrid 122 Icon Tech CVT
Toyota Corolla Hatch image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,600.67
£177.85pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,333.89
£148.21pm
View Deal
Special Offer

Audi

A6 Saloon 50 TFSI e 299 Quattro S Line S tronic
Audi A6 Saloon image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £3,770.39
£418.93pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £3,141.99
£349.11pm
View Deal
Special Offer

Volkswagen

Polo 5-Door Hatch 2.0 TSI 200PS GTI 6speed DSG
Volkswagen Polo 5-Door Hatch image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,025.00
£225.00pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,687.50
£187.50pm
View Deal
Special Offer

Renault

Zoe R110 i Iconic ZE 50kWh Auto
Renault Zoe image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,630.15
£181.13pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,358.46
£150.94pm
View Deal
Special Offer

Vauxhall

Crossland X 1.2 83ps SRi Nav Start+Stop
Vauxhall Crossland X image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0.00
Initial rental: £1,552.50
£172.50pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0
Initial rental: £1,293.75
£143.75pm
View Deal
Special Offer

Audi

A3 Saloon 35 TFSI 150 S Line S tronic
Audi A3 Saloon image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,347.49
£260.83pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,956.24
£217.36pm
View Deal
Special Offer

Skoda

Octavia Hatch 1.0 TSI 110ps SE F/Ed
Skoda Octavia Hatch image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,471.18
£163.46pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,225.98
£136.22pm
View Deal
Special Offer

Volkswagen

Golf 5-Door Hatch 2.0 TSI 300PS R DSG7 4Motion
Volkswagen Golf 5-Door Hatch image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,788.88
£309.88pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £2,324.07
£258.23pm
View Deal
Special Offer

Honda

Jazz 1.5 i-MMD Hybrid SE E-Cvt
Honda Jazz image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,567.51
£174.17pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,306.26
£145.14pm
View Deal
Special Offer

Toyota

Corolla Touring Sport Sport 1.8 Hybrid 122 Icon CVT
Toyota Corolla Touring Sport image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,571.83
£174.65pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,309.86
£145.54pm
View Deal
Special Offer

Audi

E-Tron Estate 50 71kwh Quattro 313ps Technik
Audi E-Tron Estate image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £4,050.00
£450.00pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £3,375.00
£375.00pm
View Deal
Special Offer

Skoda

Kamiq 1.0 TSI 116ps Monte Carlo DSG
Skoda Kamiq image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,880.39
£208.93pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,566.99
£174.11pm
View Deal
Special Offer

Kia

XCeed 1.6 GDI Phev 139 3 DCT ISG
Kia XCeed image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,304.61
£256.07pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,920.51
£213.39pm
View Deal
Special Offer

Audi

Q3 Sportback 35 TFSI Cod 150 Black Edition S tronic
Audi Q3 Sportback image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £3,003.37
£333.71pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £2,502.81
£278.09pm
View Deal

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