How much does car leasing cost?

06/07/2021

How much does car leasing cost?

For those who are searching for an answer to the question, 'How much does car leasing cost?', then the answer may surprise you.

Essentially, leasing a car in the UK can be as cheap or as expensive as you want it to be.

But there are some issues to consider when before signing up for a car lease deal and these include:

  • You will still have the manufacturer's warranty
  • You need to make an initial payment
  • You will have fixed monthly payments
  • You could opt for a maintenance package
  • You need to know what your annual mileage is
  • You need to pay for car insurance
  • You may have to pay an administrative fee.

It's also important to appreciate that most leasing companies will have special contract hire offers for cars and some of these will deliver cheaper lease deals.

Authorised and regulated by the FCA

However, it's also worth appreciating that you should work with a leasing company that is authorised and regulated by the Financial Conduct Authority (FCA) like Tilsun Leasing.

This will bring peace of mind for the duration of your leasing agreement.

Here, we will take a closer look at some of the considerations you will need to understand before signing up to a great car leasing deal.

And those car leasing deals means a contract hire vehicle may cost from as little as £100 or up to £3,000 per month.

A lot depends on the make and model of the lease car that you choose because this will then dictate the rental payments that you need to pay.

As mentioned, you will have monthly instalments, and these are calculated by:

  • The make and model of the contract hire car you choose
  • The initial rental payment you opt for
  • The contract hire car's depreciation
  • The length of your lease
  • Your mileage limit.

How monthly instalments are calculated

The process to understand how monthly instalments are calculated is straightforward.

It should come as no surprise that a luxury car from Mercedes, for example, will cost more to lease than a Vauxhall Corsa.

Should you want to drive a more expensive car, especially if you cannot afford to buy one outright, then your monthly rental payments can be reduced by offering to pay a larger initial rental payment upfront.

It's worth searching through the body and type of models because this will also have an effect on the price you pay.

We mentioned depreciation earlier because if you drive a higher mileage, the car's residual value - that's how much it will be worth when the contract ends - will decrease.

This means you will pay more to allow for the higher depreciation value of the vehicle.

The upfront costs when leasing a car

You will also need to understand the upfront costs when leasing a car. These will include:

  • The administration charge for dealing with your application
  • The initial rental - this is usually the first month's payment, but you can opt to pay more so your monthly payments are reduced.
  • It's also worth bearing in mind that there are no delivery charges to mainland UK addresses, and some firms will charge a vehicle reservation fee so be aware of this.

Considerations when leasing a car

Other considerations when leasing a car include:

  • Insurance: You will need to pay for car insurance
  • Wear and tear: Serious damage to a car will need the repairs paid for
  • Maintenance deals: You could sign up for a maintenance package to have the servicing, repairs and other maintenance issues covered with your monthly payment - the friendly team at Tilsun Leasing can explain more about this.

When your car leasing contract ends

If you want to know what happens when your car leasing contract ends, then you simply return the car to Tilsun Leasing for free.

There will be an inspection of the vehicle and while wear and tear damage will not attract a repair bill, more serious issues will.

Also, be aware of any excess mileage costs because going over your annual mileage limit means you need to pay extra per mile.

That's because the value of the car has been reduced so you need to consider carefully what your annual mileage will be before signing up.

How much does car leasing cost?

If you would like to know more about ‘How much does car leasing cost?’, and to sign up for a great contract hire deal for your next new vehicle, then it's time to speak with the experts at Tilsun Leasing on 03330 040 888.

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