The Ultimate Guide to Car Leasing

In the UK, over one and a half million people are currently leasing their vehicle, making it one of the most popular ways for drivers to get into the car of their dreams.

Rather than scouring second-hand dealerships for elusive ‘good deals’, business and personal car lease deals give road users the opportunity to get behind the wheel of a brand new car without the financial strain of purchase or maintenance.

Sound too good to be true? Read more about our full guide to car leasing, and find out why so many UK drivers are choosing to get their next brand new car through a lease agreement.

What is Car Leasing?

You may have already heard of a ‘Contract Hire’ or ‘Operating Lease’ – what you might not know is that they all fit within the category of car leasing.

Typically, acquiring a brand new car will require customers to make a balloon payment; when it comes time to find a new car, they will have to wrestle with depreciation values when trading-in or selling.

When you opt for a car leasing agreement, however, you essentially ‘rent’ the car of your choice through a series of affordable monthly payments. These payments remain fixed throughout the agreement, and are based upon factors such as the discounted price of the vehicle, the depreciation of the vehicle over the time you spend driving it, your expected mileage, and any maintenance cover you may wish to include within the payments.

At the end of the agreement, rather than worrying about dealership trade-ins or attempting to sell your old car, you simply return the vehicle and start again with a brand new lease deal on a brand new car of your choice.

Whether you’re looking for personal car lease deals, or something for your business, car leasing provides an excellent opportunity to drive a reliable car without the hassle of ownership.

Finance Overview

One of the greatest benefits of choosing a lease agreement over purchase is that, rather than saving and making a lump sum, you can instead pay for the use of your brand new car through affordable monthly payments. Rather than making one bulk transaction, you can cover the fixed monthly cost over a your preferred period of time – between twenty-four and forty-eight months – allowing for easier budgeting, and less stress.

But what determines the cost of your monthly payments? Here’s a few factors to consider.

  1. The Car
    The most significant factor behind the cost of your payments is what car you choose to lease. Whether you’re planning on using you vehicle for the daily commute, running errands, getting through the city or carrying the whole family around will have a big impact on the car you choose – and whether you will want to add any extras. Leasing companies are able to receive extra fleet discounts on the cars they order for lease agreements, meaning that your car will come with a lower starting point, bringing the monthly cost down.
  2. Contract Length
    Decide how long you want the contract to last for – this is typically between two and four years. A longer contract will generally result in cheaper monthly payments.
  3. Annual Mileage
    Work out what you want your annual mileage to be. Is it a car for the weekends, or will you be taking it out several times a day? It’s important that you get a good idea of your yearly mileage, to avoid any extra costs at the end of your agreement.
  4. Maintenance Cover
    Decide whether you will want to include vehicle maintenance cover within the one monthly payment. This is a great way of integrating your car’s expenses together, and avoiding expensive maintenance and repair costs if something should go wrong.
  5. Initial Rental
    This is your initial payment, and can be between one and twelve months. Choosing to pay a higher payment at the beginning of the agreement will bring your monthly down.

The Top 10 Benefits of Car Leasing

Year on year, the car financing market has been dominated by car leasing; as of 2018, personal car lease deals made up 57% of the sector, while business car lease deals comprised a further 38%. The use of cheap car lease deals more than doubled between 2013 and 2018, and this popularity is expected to continue.

  1. Drive Your Dream Car
    A cash purchase puts a lot of constraints on the car you choose; most people will have to spend time saving for the high cost of buying upfront, which can mean that they are limited to older models, or browsing second hand dealerships. With a cheap lease deals, you will be able to drive a new car out of the dealership, without the massive financial outlay of actually purchasing it.
  2. Up to Date Safety Features
    Each year, increasingly innovative and advantageous active safety features are being introduced to cars. Keeping safe on the road is every driver’s top priority, and ensuring that you are driving a reliable and up to date car will help you to avoid or alleviate harm to yourself and others.
  3. Don’t Worry About Depreciation
    We’ve all heard the scary stories about the speed at which a car’s value depreciates – and how it begins the moment you drive it off the dealership forecourt. With car leasing, not having ownership of the car means that any depreciation needn’t be your concern – you simply pay the fixed monthly payments, and return the car at the end of the agreement.


  1. You Set the Timeframe
    Prior to the start of your agreement, you will state the length of time you wish to keep the car for. This is typically between two and four years, which means that you will be able to budget for your monthly payments over a period of time that suits you.
  2. Stay Fresh
    The typical timeframe in which each lease agreement lasts is excellent for anyone who wishes to change up the car they are driving regularly.
  3. Avoid Costly Repairs
    What’s more, the manufacturer’s warranty will also cover the first three years, meaning you can avoid the financial strain of services and major repairs.
  4. No Need for an MOT
    An MOT is not required until the car has been registered for three years, which means that, with a lease agreement of thirty-six months or less, you will not need to take your car for a check-up.
  5. Integrate Your Expenses
    With business and personal car lease deals, you have the option of including maintenance cover within your one monthly payment, making budgeting for your vehicle much simpler.
  6. No Balloon Payment at the End of the Agreement
    Financing options that are weighted towards eventual ownership of the car will often require a large ‘balloon payment’ at the end of the agreement. In reality, only one out of five people who take out a PCP agreement end up claiming ownership of the car at the end. With a lease agreement, you needn’t worry – simply hand back the keys, and choose a brand new car.
  7. Monthly Payments are Fixed
    Once you have found a lease agreement that works for your budget, you can trust that your payments will remain the same until the end of the lease.

How to Choose the Right Vehicle for You

The first step to any car leasing agreement is to choose the right vehicle – one that suits you, your tastes and requirements, and your budget, too.

Choosing to lease a car means that you will have a huge array of brand new cars to choose from. You may already know exactly what you’re looking for but, if you’re still in the dark about what car you want to lease, check out any current special offers from Stock Lease Deals. These vehicles are ready and waiting, which means you’ll get your brand new car faster – not to mention at a great deal.

If you’re looking for personal car lease deals, it’s best to begin by deciding what your car will be primarily used for. If it’s for ferrying the family back-and-forth, consider something with plenty of seating, a great NCAP Safety Rating, and good fuel economy. A first time driver should consider finding a car that is safe, easy to drive, and cheap to insure. If luxury is important to you, research the latest automotive technology and find something with cutting edge features.

Once you have your dream car in mind, all you need to do is decide on the contract length, annual mileage, and whether or not you wish to include any maintenance cover. After that, you can sit back and let us shop around for the best deals for you.

Maintenance Cover

You can choose to include an additional maintenance cover within your lease agreement, which is an excellent way of integrating your payments together and ensuring that your vehicle does not bring any unexpected extra costs. Combining all of your vehicle’s requirements, such as tyres and servicing, into a single, fixed amount each month will ensure that you are protected from unexpected extra costs, third party liability, and excessive downtime if something were to suddenly go wrong.

If you opt for maintenance cover, it will begin with your lease period and last for the duration of the agreement. Your monthly payments will always remain fixed, meaning that your car’s needs are always covered within one expense, and that you can maintain peace of mind, even if the unexpected should happen.

What About Vans and Business Vehicle Financing?

You can also choose to get a brand new van with contract hire – although this is more commonly referred to as Business Van Leasing (BVH). Just like personal car lease deals, business and van leasing deals are an excellent alternative to the disadvantages of ownership.

A van leasing deal enables you to drive a brand new van, which is paid for by an affordable and fixed monthly cost. At the end of your agreed term – between twenty-four and forty-eight months –  you are able to hand back the keys and acquire a brand new van without the hassle of selling or trading-in a van that has significantly depreciated in value.

For commercial cars and vans, all of the VAT for your monthly payments is reclaimable, as well as the VAT on any optional payments you might be making for maintenance cover. What’s more, your payments are able to be counted as a tax-deductible expense.

If you’re looking for business vehicle financing, take a look at the fantastic selection of brand new cars and vans we have on offer. 

Car Leasing FAQs

If you need to know more about our cheap car lease deals, check out some of our frequently asked questions below.

  1. How Long does a Car Lease Agreement Last for?

The length of the repayment period will be set at the beginning of the deal. Typically, car leasing lasts between two and four years, although the exact length of the agreement varies depending on how long you wish to keep driving the same car for.

If you’re the sort of person who is eager to ring in the changes and keep up to date with the newest models, a two-year contract is ideal. If, on the other hand, you have found the car of your dreams and want to get the most out of it for a couple more years, then you will be able to rest easy knowing that you do not need to worry about depreciation values and trade-ins by the time the end of your four-year lease rolls around.

  1. Who Owns the Vehicle?

Since you are only leasing the car for the duration of the agreement, ownership remains with the lender. This makes business and personal car leasing deals excellent choices for anyone who does not want to stick with the same car for more than a few years since, at the end of the agreed term, you can simply hand back the keys and move onto a new vehicle.

In addition, the leasing company remain responsible for paying the vehicle’s road tax. You can also choose to have a Maintenance Inclusive Contract, which can cover servicing, repairs, breakdown and recover, and tyre and brake maintenance – all within your fixed monthly payment.

  1. Is Maintenance Cover Included?

Maintenance cover is an affordable, optional addition to your monthly payments. The cost will depend on the type of car you choose, the length of the contract, and the annual mileage you agree upon at the beginning of your contract.

  1. Is Insurance Included within the Lease Agreement?

You can also choose to have your insurance costs added to your monthly payments. This is available for business and personal car lease deals, and provides you with another great way of integrating together the costs of running your car -- as well as saving you time searching through insurance renewal quotes.

  1. How Much Does Car Leasing Cost?

The exact cost of your monthly payments will depend on the discounted cost of the car you choose to lease, the length of your agreed contract, the size of your initial payment, and whether or not you choose to add maintenance cover to your payments.

To get an idea of what to expect for your monthly payments, either get in touch with us, or find a car you are interested in and get started with our online finance proposal.

  1. What is the Difference Between a Car Lease Deal and Personal Contract Purchase?

There are some similarities between car leasing and Personal Contract Purchase (PCP). Both offer a flexible and affordable alternative to upfront purchase, giving car buyers more ways of avoiding having to pay a lump sum for the use of a reliable car.

The key difference between a lease agreement and PCP is that PCP gives the opportunity for eventual ownership. At the beginning of a PCP agreement, a final ‘balloon payment’ is calculated which, following the final scheduled payment, may be paid by the driver in order to gain possession of the car.

Since car lease deals do not offer eventual ownership, the monthly payments generally end up being more affordable – particularly on shorter contracts. Four in five PCP customers do not end up paying for ownership of their car, making contract hire a very popular option for car buyers who want the opportunity to change their car every few years.

Genus Leasing

If you would like to drive a new car with a lease agreement perfectly tailored to your budget and lifestyle, then simply get in touch to discuss your options. Whether you’re looking for personal car lease deals, or something for your business, we here at Genus Leasing have the know-how and enthusiasm to find you the perfect car at an affordable rate, and will be able to help you every step of the way.


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