THE INS AND OUTS OF PERSONAL CAR LEASING IN THE UK.

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Personal car leasing has become an increasingly popular option for individuals in the UK who want a cost-effective and hassle-free way to drive a brand-new vehicle. With this method of acquiring a car, you can enjoy the thrill of a new ride without the long-term commitment and ownership responsibilities that come with purchasing.

In this comprehensive guide, we’ll delve into the world of personal car leasing in the UK, exploring its benefits, the different options available, how the process works, and what you should consider before jumping into a lease agreement.

Understanding Personal Car Leasing

Personal car leasing, often referred to as Personal Contract Hire (PCH), is essentially a long-term car rental. Instead of buying a car, you enter into a contractual agreement with a leasing broker such as Ready2Lease to use a new vehicle for a set period, typically two to five years, in exchange for monthly payments.

The key elements of personal car leasing include:

Initial Payment

When you start a personal car lease, you’ll need to make an initial payment, also known as a deposit. This payment is typically equivalent to one, three-, six-, nine, or twelve-monthly payments. There is often an option to nominate a fixed initial rental.

The more you pay upfront the less you will pay per month, and vice versa.

Monthly Payments

You’ll make regular monthly payments for the duration of your lease. These payments are usually fixed and are based on factors such as the car’s value, lease term, and mileage allowance.

Mileage Allowance

Leasing agreements come with a specified mileage allowance, which is the maximum distance you can drive the vehicle without incurring additional charges. Exceeding this limit typically results in excess mileage charges between 5 and 25 pence per mile.

Maintenance

While maintenance costs are not included in the lease, you can opt for a maintenance package for an additional fee, which covers servicing, repairs, replacement tyres and consumables, as well as extended breakdown cover.

End of Lease

At the end of the lease term, you return the car to the leasing company. You have the option to start a new lease with a different vehicle or go your separate ways.

Benefits Of Personal Car Leasing

There are several advantages to personal car leasing that make it an attractive option for many in the UK.

Affordability

Leasing typically requires a lower upfront payment compared to buying a new car, making it more accessible to a broader range of budgets.

New Car Every Few Years

With personal car leasing, you can enjoy driving a brand-new car every few years. This allows you to experience the latest in safety, technology, and fuel efficiency.

Lower Monthly Payments

Monthly lease payments are generally

lower than loan payments for purchasing a new car because you’re

essentially paying for the vehicle’s depreciation during the lease

term.

Maintenance Options

Many leasing agreements offer the option to include maintenance in the monthly payments, providing peace of mind and easier budgeting.

No Depreciation Worries

Since you’re not the owner of the vehicle, you don’t have to deal with the depreciation in value that occurs with car ownership.

Electric cars

If you are considering the move to electric but want a short term contract to see how it fits your lifestyle, you can opt to lease an electric car

for two years to try it out.

Hassle-Free Returns

At the end of the lease, you simply return the vehicle, avoiding the hassle of selling or trading in a used car.

Choosing The Right Lease Option

When considering personal car leasing in the UK, you’ll need to consider the below points as to what is right for you:

Contract length

Generally speaking the longer the contract the cheaper the average monthly price, although you can often find shorter contracts which still represent very good value.

Mileage

You are required to nominate how much mileage you need, and your lease price will vary depending on this figure. It is important to not overstate your mileage as you will not get anything back at the end, but also not to underestimate as the excess mileage charge is normally higher than it would have been to start with.

Maintenance

Most cars or vans will come with the option to have maintenance, this can be particularly worthwhile if your mileage is above 15k per annum. It may seem an expensive add on, but when your car needs more than one service per year and multiple consumables such as tyres, it can offer a considerable saving in the long run.

More Factors To Consider Before Leasing

Before you dive into personal car leasing in the UK, it’s essential to consider various factors to ensure that it’s the right choice for you:

Budget

Assess your monthly budget to determine how much you can comfortably afford in lease payments.

Mileage

Be realistic about your driving habits. Choose a mileage allowance that aligns with your expected annual mileage to avoid excess mileage charges.

Length of Lease

Decide how long you want to lease the car. Shorter leases typically come with higher monthly payments, but you’ll have the flexibility to change vehicles sooner.

Depreciation

Research the depreciation rates of the cars you’re interested in. High depreciation can result in higher monthly payments.

Maintenance

Decide whether you want a maintenance package included in your lease or if you prefer to handle maintenance independently.

Fuel type

Moving to electric can result in better whole life costs, as well as avoiding fees for driving into some major cities.

Credit Score

A strong credit score will help you secure better lease terms. Check your credit report and address any issues before applying for a lease.

Applying For A Personal Car Lease

Once you’ve done your homework and selected the right lease option, the application process is relatively straightforward:

Select the Vehicle

Choose the car you want to lease. Consider

factors such as make, model, trim, and any optional extras you

desire.

Determine Terms

Discuss the lease term, mileage allowance, and other specifics with the leasing company. Ensure you understand all the terms and conditions.

Credit Check

Expect a credit check as part of the application process. A strong credit score will help you secure a better deal.

Sign the Agreement

Carefully review and sign the lease agreement, clarifying any doubts or questions you may have with the leasing company.

Initial Payment

Make the initial payment, which is usually equivalent to several months’ worth of lease payments.

Insurance

Arrange comprehensive insurance coverage for the leased vehicle.

Delivery

Once everything is in order, the leasing company will deliver the car to your specified location.

Understanding The Costs

The cost of personal car leasing in the UK can vary significantly based on the vehicle, lease term, mileage allowance, and additional options you select.

Here’s a breakdown of the key expenses you can expect:

Initial Payment

The upfront payment, typically equivalent to three to six months’ worth of lease payments.

Monthly Payments

The regular fixed payments you make for the duration of the lease.

Maintenance

If you opt for a maintenance package, this will be included in your monthly payments.

Excess Mileage Charges

If you exceed the agreed-upon mileage allowance, you’ll incur additional charges, typically per mile.

Excess Wear and Tear

You may be responsible for any excessive wear and tear on the vehicle when you return it at the end of the

lease.

Insurance

Comprehensive insurance coverage is a requirement, and the cost of insurance will depend on your driving history and the

car you’re leasing.

Road Tax

This is included in most lease agreements, but you should always double check.

Early Termination Fees

If you decide to end the lease early, you may incur penalties.

Returning The Vehicle

When the lease term is over, you’ll need to return the vehicle to the leasing company. Here’s what you can expect during the return process:

Vehicle Inspection

The leasing company will inspect the vehicle for any damage or excessive wear and tear. It’s essential to return the car in good condition to avoid additional charges.

Excess Mileage Charges

If you exceeded your mileage allowance, you’ll be responsible for paying the excess mileage

charges.

Excess Wear and Tear

You may incur charges for any damage beyond normal wear and tear. It’s a good idea to address minor damages before the return inspection.

End of Lease Options

At this point, you can choose to start a new lease with a different vehicle, or move on to a different finance product, outright purchase or whatever best suits your needs.

Is Personal Car Leasing Right For You?

Personal car leasing in the UK offers a convenient and cost-effective way to enjoy a new vehicle without the long-term commitment of ownership.

However, it’s crucial to evaluate your budget, driving habits, and preferences before making a decision. If you value driving the latest models, appreciate fixed monthly payments, and want to avoid the hassles of car ownership, leasing could be the perfect solution for you.

Keep in mind that leasing terms, interest rates, and available models can change, so it’s always a good idea to shop around and compare offers from different leasing companies to find the deal that suits you best.

Additionally, be sure to thoroughly read and understand the terms and conditions of your lease agreement, and don’t hesitate to ask questions if anything is unclear.

Whether you’re interested in leasing a premium brand such as BMW or Audi, the practicality of a Ford compact SUV, or the efficiency of a Tesla electric vehicle, personal car leasing can provide a tailored solution that meets your specific needs and preferences.

Enjoy the freedom of the open road, all while experiencing the latest advancements in automotive technology, safety, and design.

For your Personal or Business Car Leasing quote, just click on the Ready2Lease logo below.