The car rental and leasing industry in the UK is worth £16.6bn. And that number is projected to grow steadily over the next five years. Why is that?
For one thing, personal car leasing allows individuals to get behind the wheel of a brand new car without the headaches of owning a car.
Car leasing is an affordable option for personal drivers due to low, fixed monthly payments, little or no deposit and worry-free maintenance plans.
If you want to drive a luxury car but your budget doesn't allow you to buy one, you can find a cheap car lease deals on even luxury models. Read on to learn all about car leasing in the UK.
How Do Personal Car Lease Deals Work?
Basically, car leasing is like renting a car for a long time. You agree to pay a set monthly amount over the term of the lease. In return, you get to use the car for a set amount of time and a certain number of miles.
Car leasing deals usually run for two to four years. In most cases, you get to choose how long you want the car. Most people who lease prefer to have a shorter contract so that they can get a brand new car sooner.
The cost of car leasing in the UK depends mainly on the kind of car you choose to lease. A small hatchback will cost much less per month than a luxury SUV.
Generally, to lease a car, you put down a deposit that is equal to three or six months of payments upfront. But some leasing companies will allow you to put nothing down. Make sure you find out about deposits upfront to avoid unpleasant surprises.
Then you pay an agreed amount each month while you have the car. At the end of the term, you give the car back to the finance company.
If you don't return the car in good working condition, you will have to pay for the damage. Also, if you drive more miles than what is allotted in your contract, you will have to pay a charge for the extra miles.
To be approved for car leasing in the UK, the lender will run a credit check on you. You may or may not be approved based on your credit history. Yet, all car leasing companies work independently. So each may interpret your credit rating differently. If you aren't approved at one leasing company, you may be approved elsewhere.
When Personal Car Leasing is the Right Option?
If you have a good credit score, you will probably get a better choice of leasing rates as the finance approval will be easier.
That doesn't mean that leasing isn't a good option for you if your score is just OK. It just means that if your score is high, that's an extra reason why leasing may be a great option for you.
For people who want a brand new car for the lowest cost, car leasing is a good fit. Car leasing a luxury car is less expensive than financing the same car most of the time.
Many people prefer to lease a car because they don't want to be bothered with costly repairs that are needed as a car gets older. You rarely have any problems with a leased car because it is so new.
Plus, car leasing companies cover the road tax along with manufacturer breakdown. Breakdown cover for the full contract is included with a maintained lease.
Certain leasing companies can include insurance with total care car leasing plans.
If you don't want to worry about car depreciation and want a simple way to get behind the wheel, car leasing makes a lot of sense.
Business owners who have their company vat-registered can lease a car and deduct the monthly cost from your profits. You can also re-claim 50% of VAT on the finance and 100% of VAT on maintenance.
Personal Car Leasing Restrictions
Car leasing is not like owning the car outright. You are bound by some restrictions.
Think of it kind of like renting a flat. You live there, but you can't do renovations or even paint the walls without permission. Same with car leasing. There are some restrictions you should keep in mind.
For one thing, you can't modify the car. Also, if you want to take the car abroad, you will need to request the correct paperwork from the Lease company which is valid for 12 months. Many people choose to request the paperwork each year so that they can take holidays without worrying about the last minute issues.
When your lease is up and you return the car, the leasing company will inspect the car for damage. Wear and tear is normal. They won't count that against you. There are strict guidelines on Fair Wear & Tear from the BVRLA which all Lease companies follow.
But if there is a crack in the windshield or a dent in the bumper, you will be charged to fix this damage. It is probably cheaper for you to fix any damages before you return the car.
Things to Consider Before Leasing
Driving more miles than are in your contract can be expensive. Excess miles may cost anywhere from 3p to 50p per mile, depending on the make and model of the car you lease.
Be realistic about how much driving you will do over the next two to four years. It is often a better idea to pay for a plan that has a higher mileage limit than to pay excess mileage charges at the end of the term.
Remember, some prices listed don't include VAT. Don't be misled by a low payment that isn't true. All personal quotes should include 20% VAT.
Thanks for reading. We hope this guide on personal car leasing has been insightful.
If you are looking for the cheapest car lease deals contact Genus Leasing for your free quote today. We offer no deposit deals, classic car finance, and lease purchases for those who want to keep the car at the end of the term.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
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