The BEST guide to leasing a car

04/10/2021 | Steve Lumley

The BEST guide to leasing a car

When it comes to leasing a car, this is an increasingly popular way to get behind the wheel of a brand-new vehicle - though you never get to own the car itself.

Car leasing, or contract hire, means you essentially rent the car over the long-term after you've paid an initial payment and then pay every month over an agreed period.

And when that contract ends, you simply hand your contract hire car back and there's nothing else to pay - except for the potential of any damage that needs to be repaired under the car leasing company’s fair wear and tear guidelines.

Also, when you sign up to lease a car, you will agree how many miles you will cover every year and if you exceed this agreed amount when the contract ends, then there will be an excess mileage charge to pay.

Otherwise, leasing a car is a simple way of driving a new vehicle and it's a cost-effective way to get a new car every few years.


The pros of leasing a car

There are pros and cons when it comes to leasing a car in the UK, and the pros include:

  • Fixed monthly payments
  • Servicing and maintenance bills can be included
  • Lower payments
  • You don't have to worry about depreciation
  • You get to enjoy a new car when the agreement ends.


The cons for leasing a car include:

  • Be aware of excess mileage charges which can be steep with some car leasing companies
  • Leasing tends to be for new cars - not cheaper used cars
  • Leaving your agreement early can be an expensive undertaking
  • You will never own the car must return it when the agreement ends.


How does leasing a car work?

While leasing a car is a straightforward undertaking, it's a process that you need to understand.

The simple process for contract hire works like this:

  • You choose the make and model of the brand-new car you want to drive
  • You agree to lease the car for an agreed period
  • You'll make one initial payment - this will be a factor of the monthly payment so, for example, with Tilsun Leasing the initial rental amount try that one, three, six or nine months of the agreed monthly amount.
  • You agree to pay a fixed monthly amount until the agreement ends
  • When the agreement ends you return a car.
  • When the car is returned, you can decide whether to lease another brand-new car or not.

Also, it's worth appreciating that when you make the initial payment, by paying a larger amount means you will have lower monthly payments to meet.

Which cars can I lease?

One of the big attractions for leasing a car in the UK is that you can choose just about any car to lease.

Not every leasing company will be offering contract hire deals on every manufacturer’s car, but all of the popular makes and models will be available.

The make and model of the car will have an impact on how much you pay every month.

For example, if you choose to lease a premium marque, then these will usually be more expensive to lease than other makes.

From that point, you also need to appreciate that the monthly payments you will be making depend on the car's depreciation during the length of the agreement.

The most popular cars tend to hold their value better than a premium marque and you could still be looking at the car losing as much as 40% over three years in value.

This drop in value is a concern when you buy a car outright but when you lease a vehicle, it's an issue for the leasing company and not you.

To put it simply, a low-price car will tend to have low monthly payments because there's less depreciation to worry about.

Ultimately, this means that someone who is leasing a car in the UK will be able to get behind the wheel of a brand-new car that they would otherwise be unable to afford – so leasing makes more expensive cars affordable for many people.


How to work out your car leasing payments

When you search the Tilsun Leasing site for contract hire car deals, you will find a car that you want to lease, and you like the contract terms.

It's important to appreciate that car leases tend to be flexible to suit a range of circumstances but there are some issues that will affect how much you pay for a car lease, and they include:

Your annual mileage limit

It's important that you work out carefully how many miles you will travel every year because if the limit is too high, your car will be more expensive to lease than it should be. Choose a figure that is too low, and you will be facing an excess mileage charge when the contract ends.

Your initial payment

All leasing companies have an initial payment, and this is a one-off cost when the lease begins. It's essentially a multiple of the monthly payment and with Tilsun Leasing, it will be the equivalent of one, three, six or nine of your monthly payments.

Car lease agreement length

With Tilsun Leasing, you have a choice for how long you would like your car leasing agreement to run for. The terms are two years, three years or four years and a lot depends on the mileage and length of time you want the agreement to run for - these affect the price you pay every month. You may find that opting for a four-year contract hire deal may lead to lower monthly payments.

Tips on getting the cheapest car leasing deal

There are some tips on how you can access the cheapest car leasing deal and that's to:

  • Find a car that doesn't lose much in value
  • Check the car leasing company's special deals page
  • Choose to pay more as your initial payment
  • Opt for a lower mileage limit.

It's also worth mentioning about ending your car leasing agreement early.

Should you decide to end the contract hire agreement before the term ends, you will need to speak with the car leasing company as soon as possible.

While you will be able to give the car back, be prepared to pay a termination fee-and this can be quite steep.

Also, when the car lease agreement ends, there's no facility for you to buy the car, regardless of how much you would like to do so.

When your car lease agreement ends, you must hand the car back.

It's also worth bearing in mind that any damage that has been caused to your car must either be repaired if it is serious.

This is the point where you could check the fair wear and tear guide from the British vehicle rental and leasing Association.

This guide makes clear what a leasing company will determine as normal wear and tear-and what will be classed as being serious damage that needs to be paid for.

Essentially, this guide to leasing a car makes clear that the process is straightforward, and some research needs to be done and you could always talk over your needs with the team at Tilsun Leasing on 03330 040 888.

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Lex Autolease
Leasing Broker Federation

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