Looking to get a new car and want to research what options may be available to you. Take a look at the below information on car leasing to see if this may be a suitable option for you and also understand other potential solutions such as Hire Purchase Car Finance and Personal Contract Purchase.
How does car leasing work?
Leasing a car is effectively long-term rental – you pay a fixed monthly fee to use the car for an agreed time period and mileage amount.
This means you don’t actually own the car, but it’s a good option if you want to change your car on a regular basis.
When researching your options for purchasing a new car it’s good to take a look at information available and ensure that car leasing as an option is right for you and your situation over the next 3 to 4 years.
Frequently asked questions on car leasing
Do I pay monthly?
Yes, your monthly payments will remain the same through the duration of your agreement
Do I own the car?
No, you are hiring the car for the agreed time period. After this you hand back the car.
Is mileage limited?
Yes, you will have a mileage limit. Exceeding this limit will mean you incur additional charges.
What cars are available to lease?
You can get most types of car on a lease contract from compact city cars, hatchbacks to family SUV’s. It is worth doing your research and being flexible with the type of car you want as you could find some great deals on particular brands and models.
Will the car be delivered to my door?
It is dependent on the supplier. Some will offer free UK delivery to your door and some may require you to pick it up from a dealership. In the majority of cases, vehicles are driven to your chosen handover address.
What about road tax?
The leasing company is the registered keeper with the DVLA. It is their responsibility to ensure the vehicle is taxed while registering a leased vehicle and throughout the contract. Do check the details associated with your agreement to ensure this is the case.
What about servicing?
Ultimately, it would be your responsibility to maintain the vehicle and this includes servicing. It may be worth seeing if your provider can offer you any deals on servicing over the length of the agreement.
What about the MOT?
Most lease agreements last 2-3 years. A car does not have to be MOT’d until it is over 3 years old. This means that, unless your lease agreement is longer than 3 years, you will not have to worry about the car going in for an MOT.
What about insurance?
You will be responsible for providing full comprehensive insurance for your car.
Is my leased car covered by the manufacturer’s warranty?
Typically, a warranty is offered on any new or certified pre-owned vehicle and covers any defect or breakdown that occurs from the manufacturer’s design.
What happens when the lease ends?
You return the car. You must ensure that any damage is rectified, and the car is in good condition.
Can I buy the car?
No, this is not an option with car leasing
Can I return the car early?
You can end a car leasing agreement at any time, but depending on how much has been repaid, and how your payments are structured, the financial penalties could be harsh. If you are struggling to meet your payments you should let your finance company know straight away, as they may be able to help.
What other options are there other than car leasing?
Hire purchase car finance gives people the chance to buy a vehicle without having to pay for the amount in full before they can drive it. You hire the car from the finance provider for a set out time and your agreement will be secured against the vehicle itself. That means the car is legally owned by the lender and you will be the registered keeper while you make fixed monthly payments across a set amount of time. Once you have paid the car’s price in full, plus an amount of interest together with the option to purchase fee, the car will be yours and you become the legal owner.
Personal contract purchase or PCP is where you will be paying off the value of the depreciation of the car, not the full value of the car. At the end of the agreement, if you decide you want to keep the car, you’ll need to pay what’s known as a ‘balloon payment’. This covers the cost of the vehicle and transfers ownership from the finance company to you. If you don’t want to keep the vehicle or don’t have the money to pay off the balloon payment you can give it back, or start a new PCP deal and get a new car.
For more information on the options that could support your next car purchase please visit our blog post: Car Finance Options Comparison.
Does Go Car Credit offer Car Leasing?
Here at Go Car Credit we do not offer car leasing. We offer Hire Purchase Car Finance.
At Go Car Credit, we specialise in helping people with bad credit get behind the wheel and onto the open road. Find out if hire purchase (HP) car finance could be the perfect option for you.
Take a look further at our range of resources that explain what we offer and how you could help you with your next car purchase. Alternatively, if you are ready to start your car finance journey with us apply today it takes less than 2 minutes.