Car Leasing Explained

Leasing is a long-term rental contract that offers the exclusive use of a car or van for a certain period of time at a fixed monthly price. Offers an alternative, and often cheaper, financing solution to buying a new car or van with a bank loan or dealer financing, and quite often you can get bigger discounts on the vehicle than the more traditional HP method .

Car leasing helps you avoid unexpected costs by offering a fixed monthly payment over the term of the lease. The customer also does not have to worry about depreciation or the sale of the car, as this job falls to the leasing company.

Leasing a new car also offers an element of peace of mind, knowing that your car is less likely to develop a problem than if you had to buy a used car.

How car leasing works

The most effective way to obtain a car lease is through a broker.

Many brokers have access to greater auto discounts and cheaper financing rates than other financing institutions.

At the beginning of a lease, the client pays an initial rent generally equal to three monthly payments, but this can be increased depending on your budget.

Then, the client makes monthly payments during the term of the contract. At the end of the lease (usually two, three or four years), the customer simply returns the car with no further obligations, or may choose to purchase the vehicle depending on the type of contract made.

Leasing a car is becoming increasingly popular with motorists in the UK due to the rising cost of ownership and the fact that more drivers like to trade in their car more often.

With the increasing use of the Internet among the population, more people are shopping online, and renting a car is no different than buying a book from an online store.

There are many car rental websites, but be careful who you choose to deal with, as many of them hide additional costs such as administration fees, reservation fees, and documentation fees.

When deciding on a lease, be sure to ask if there are any other fees and charges besides the cost of the lease itself.

It’s also worth noting that underwriting criteria vary greatly between different types of funders and funding methods, so it’s always worth asking who you’ll be funding and what the criteria are. This will save you some time when submitting your financing request after you have chosen your car.

If you are in doubt about anything, take the advice of someone who has rented a car before or ask the leasing company as many questions as you can.