What you need to know when leasing a car

08/07/2021

What you need to know when leasing a car

This article about what you need to know when leasing a car will help answer your questions and ensure your contract hire deal is the best - and suits you.

Essentially, if you want to get behind the wheel of a brand-new car at a low monthly cost, then leasing a car could be for you.

Some people may refer to this as contract hire and there is a range of leasing companies offering long-term leasing deals for a range of monthly payments.

Leasing a car

There's a lot to consider when leasing a car instead of buying one, but if you want to enjoy a new car every few years, then leasing is the route to consider.

Not only will you not have the issues of selling your car when you want to buy a new one, with a lease deal you just hand the car back when the agreement ends.

However, you need to be aware of some issues including:

  • Annual mileage: You need to know how many miles you will travel every year since there's an excess mileage charge for going over that agreed limit
  • Wear and tear: While the leasing firm will accept that cars do get damaged over time, serious damage will need to be repaired and you will need to pay.

The process of leasing a car is straightforward and a leasing company will check your credit score to ensure you can meet the monthly payments.

Indeed, it's always a good idea to use a leasing company that is authorised and regulated by the Financial Conduct Authority (FCA) - as Tilsun Leasing is.

What is a car lease?

It's also worth understanding, what is a car lease?

Essentially, this is a legal agreement between the car lease company and the customer who will agree to pay a monthly amount while the agreement runs.

This monthly payment is calculated on the vehicle's depreciation - that's the difference between the price of the new car and its value when the lease ends.

The lease agreement will also spell out:

  • How much you will pay when your lease begins - this payment ranges from one month and up to nine months
  • How long the lease will be - with Tilsun Leasing you can lease a car from 24 months and up to 48 months
  • What your annual mileage will be - this could be anything from 5,000 miles per year, to 30,000 miles.

Also, one of the benefits of paying more as an initial payment is that your monthly payments will then be reduced.

It's also worth noting that if you travel lots of miles every year, the cost of leasing a car will be more than for someone who travels just 5,000 miles, for example.

Benefits to leasing a car

What benefits are there to leasing a car?

There is a range of benefits to leasing a car, rather than buying a new car outright. They include:

  • Car lease payments tend to be lower than a monthly loan payment
  • A car lease may require a lower initial payment than when buying a vehicle with a loan
  • If you cannot afford to buy a brand-new car, then leasing may make this a more affordable solution
  • If you want to change your car regularly for the latest model, then leasing is worth considering
  • When leasing a car, you don't have to hassle of having to sell or trading it in
  • A lease car will still be covered by the manufacturer's warranty.

The disadvantages of leasing a car

While there are advantages to car leasing, there are also some disadvantages to contract hire.

There's no doubt that leasing a car may not be for everyone and the disadvantages include:

  • Over the long-term, leasing a car may cost more than buying when you hold onto a new vehicle
  • If you don't need a leased car anymore, getting out of the agreement can be expensive
  • You cannot adapt or modify a leased car
  • You will never own the car when the lease is running - and you cannot buy the car when it ends.

Other considerations when leasing a vehicle

There are other considerations when it comes to leasing a vehicle, including whether you want a personal or business lease.

For those who are business owners or an employee who needs a company car, then a business lease deal may prove to be more cost-effective than choosing a personal lease.

A lot depends on your personal circumstances but if you need a new car for work purposes then it's worth considering a business contract hire deal.

The care and maintenance of a leased car is also important, and you need to consider:

  • Maintenance packages: To bring peace of mind, Tilsun Leasing offer a maintenance package that will include the servicing and various items that need replacing
  • Future needs: When signing up to a car leasing deal, you may be choosing a car that suits you currently, but will it meet your future needs?
  • Costs: Before signing a car leasing agreement, you should check carefully what the contract consists of - including the agreed annual mileage, how many months the lease will run for and how much you need to pay as an initial rental.

For any questions about what you need to know when leasing a car in the UK, then it's time to speak with the Tilsun Leasing team on 03330 040 888.

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