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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

SEAT

Ibiza Hatch 1.0 MPI 80ps FR Sport EZ
SEAT Ibiza Hatch image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,512.76
£168.08pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,260.63
£140.07pm
View Deal
Special Offer

Mercedes

C-Class Coupe C200 1.5 AMG Line Premium Auto
Mercedes C-Class Coupe image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,901.74
£322.42pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £2,418.12
£268.68pm
View Deal
Special Offer

Vauxhall

Corsa 5-Door Hatch 1.4 90PS SRi Nav
Vauxhall Corsa 5-Door Hatch image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,195.67
£132.85pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £996.39
£110.71pm
View Deal
Special Offer

Volkswagen

Golf 5-Door Hatch 1.6 TDI 115PS 5speed GT Edition
Volkswagen Golf 5-Door Hatch image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,793.56
£199.28pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,494.63
£166.07pm
View Deal
Special Offer

Skoda

Scala 1.0 TSI 95ps SE
Skoda Scala image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,418.47
£157.61pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,182.06
£131.34pm
View Deal
Special Offer

BMW

2 Series Coupe M240i 3.0 Auto
BMW 2 Series Coupe image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,702.70
£300.30pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £2,252.25
£250.25pm
View Deal
Special Offer

Volkswagen

Tiguan 1.5 Evo TSI 150PS Match
Volkswagen Tiguan image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,034.61
£226.07pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,695.51
£188.39pm
View Deal
Special Offer

Hyundai

i40 Tourer 1.6 CRDi 136 SE Nav
Hyundai i40 Tourer image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,947.89
£216.43pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,623.24
£180.36pm
View Deal
Special Offer

Audi

Q8 50 TDI 286 Quattro S Line Tiptronic
Audi Q8 image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £5,824.33
£647.15pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £4,853.61
£539.29pm
View Deal
Special Offer

Skoda

Kodiaq 1.5 TSI 150ps Act SE L DSG
Skoda Kodiaq image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,099.63
£233.29pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,749.69
£194.41pm
View Deal
Special Offer

Citroen

Grand C4 Spacetourer 1.2 Puretech Flair 130 Start+Stop
Citroen Grand C4 Spacetourer image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,684.80
£187.20pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,404.00
£156.00pm
View Deal
Special Offer

Mazda

6 Saloon 2.0 145ps Skyactiv-G SE-L Nav+
Mazda 6 Saloon image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,579.50
£175.50pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,316.25
£146.25pm
View Deal
Special Offer

Renault

Captur 0.9 TCE 90 Iconic
Renault Captur image

Personal Inc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,184.54
£131.62pm

Business Exc VAT

Term: 36 months
Mileage: 5000 miles
Fee: £200
Initial rental: £987.12
£109.68pm
View Deal
Special Offer

BMW

X4 xDrive20d M Sport Auto G02
BMW X4 image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0.00
Initial rental: £3,423.17
£380.35pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0
Initial rental: £2,852.64
£316.96pm
View Deal
Special Offer

BMW

X5 xDrive30d M Sport
BMW X5 image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0.00
Initial rental: £4,831.06
£536.78pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £0
Initial rental: £4,025.88
£447.32pm
View Deal
Special Offer

Citroen

C3 1.2 Puretech 110 Flair EAT6 Start+Stop
Citroen C3 image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,219.75
£135.53pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,016.46
£112.94pm
View Deal
Special Offer

Hyundai

Kona 1.6 GDI Hybrid 141 Premium DCT
Hyundai Kona image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £2,121.44
£235.72pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,767.87
£196.43pm
View Deal
Special Offer

Mitsubishi

Eclipse Cross 1.5 Exceed
Mitsubishi Eclipse Cross image

Personal Inc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,957.50
£217.50pm

Business Exc VAT

Term: 48 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,631.25
£181.25pm
View Deal
Special Offer

MINI

Hatch 5-Door 1.5 Cooper Sport Comfort Nav Pack
MINI Hatch 5-Door image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,623.35
£180.37pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,352.79
£150.31pm
View Deal
Special Offer

Renault

Kadjar 1.3 TCE 140 GT Line
Renault Kadjar image

Personal Inc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £240.00
Initial rental: £1,794.74
£199.42pm

Business Exc VAT

Term: 24 months
Mileage: 5000 miles
Fee: £200
Initial rental: £1,495.62
£166.18pm
View Deal

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