Can't decide if you should lease or buy a new car?

For many people, leasing is the ideal choice.

Think of it a long-term rental; instead of buying a car outright which might involve a big personal loan, you pay in fixed monthly instalments for an agreed amount of time, and then hand it back at the end.

There are, however, pros and cons to consider before making a commitment. On this page we’ll try to answer some of the questions you might have to help you make the right choice.

What do I get when I lease a car from the lcv group?

• A new car from our wide range
• Free delivery in the UK mainland
• Full manufacturer's warranty
• Road tax included in your monthly rentals
• A comprehensive maintenance package is available as an extra

What do I need to consider when leasing a car?

• Length of contract: How long do you want to drive the car for? Opting for a longer contract reduces the monthly expense, but it also means a lengthier waiting period before you can upgrade your vehicle.
• Mileage estimate: The annual mileage you choose will impact the overall cost of your lease, so be careful you don’t over or underestimate too much.
• Insurance coverage: Don’t forget to factor insurance for your car into your budget.

How does car leasing actually work?

There are two main types of leasing: Personal Contract Hire and Business Contract Hire.

As the names suggests, one is for personal use, the other is for business. The only difference is that a business contract can recover the VAT and might benefit from tax allowances, and so if you are using the vehicle for business purposes be sure to pick the right one.

Both require an initial rental, which is a payment made upfront, followed by the monthly payments which are fixed in the contract.

That means you'll know exactly how much you’ll be paying each month, assuming all the agreed terms are met such as the condition of the car and the mileage limit.

Contract lengths can vary, usually between two and five years, and we can tailor a great deal to suit your needs.

At the end of that period you return the car, and then you can start the process again with the latest model if you want – think of it as an upgrade every few years.

Should I lease or buy a car?

This is the big question for many.

If you really want to own your own car outright, then it might be best to buy. There are, however, several disadvantages to buying new, with the top one being the expense.

If you’d rather swap your car for the latest model every few years, then leasing might be the best option. You can set manageable payments each month, and you don’t have to worry about buying or selling the car – that will all be done for you.

What are pros and cons of leasing a car?

The advantages:

• Secure fixed-cost motoring
• Minimal upfront deposit and affordable monthly payments
• Enables regular vehicle changes – just hand it back at the end of the contract and pick a new one
• Shield yourself from depreciation risks associated with vehicle ownership
• The flexibility to include additional maintenance services
• The finance company handles all buying and selling admin

The disadvantages:

• If ownership is important, you will have to hand the car back at the end of the contract
• You need to determine your annual mileage beforehand, which might be difficult for some
• Exceeding the agreed mileage can incur additional charges
• Early termination of the contract comes with costs
• Failure to return the car in a well-maintained state may result in charges for damages beyond those listed in the 'Fair Wear and Tear Guide'

How are the monthly costs for leasing a car calculated?

There are four key factors to be considered – the cost of the vehicle, the amount you pay upfront, how many miles you expect to drive, and the value of the vehicle at the end of the contract:

• Overall vehicle cost: More prestigious manufacturers and models come with higher price tags that influence the monthly payments.
• Initial rental size: The initial rental – your first payment – is typically nine monthly payments, or somewhere between one and 12 months. The larger the initial payment, the smaller the monthly rental costs, so the more you can pay upfront the less you pay each month.
• Mileage considerations: Higher mileage incurs higher monthly payments, reflecting the increased wear on the vehicle.
• Anticipated depreciation: Vehicle depreciation is inevitable and, as such, costs are determined based on the car’s residual value – that’s the estimated value of the car at the end of the contract.

What happens at the end of the car lease?

The car is returned to the finance company at the end of the contract.

They conduct a thorough inspection for both damage and excess mileage, but don’t worry too much about minor damage charges – a certain degree of wear and tear is to be expected after year/s of use. This is commonly referred to as ‘Fair Wear and Tear’, which one of the team would be happy to discuss with you.

Can I end the lease early?

If your circumstances change during your agreement, we encourage you to reach out to us as quickly as possible so we can offer guidance on the best course of action.

If you do need to terminate your contract prematurely an early termination fee is likely, but our team can explore some alternatives, such as extending your contract and adjusting monthly payments to enhance affordability.

If you have any questions about this one of the team would be happy to talk you through the options.

Can I lease a car with a bad/ negative credit score?

Finance companies need assurance that you have the financial capability to meet your obligations. This assurance is often evaluated through a credit score. A favourable credit score is essential for them to approve your lease application.

I’m ready to lease a car – what do I do next?

Here’s a handy step-by-step guide to leasing a car:

1. Select your car: Got a specific manufacturer or model in mind, or just looking for a special offer? You can find all of our great deals here.
2. Determine your monthly payments based on the initial rental: The more you pay on your initial payment, the lower the monthly expenses.
3. Agree on a duration: How long do you plan on keeping the car before returning it?
4. Specify your mileage: Pre-agree your annual mileage allowance for the duration of the agreement.
5. Consider additional options: Need any extras, like our great maintenance package? These can be added into the total.
6. Finalise your order: One of the team can guide you through the process of completing the order and passing it on for any checks such as your credit score.
7. Contract signing: When everything is in place, you can sign the necessary documents to complete the lease process.
8. All done! With everything checked and signed, your chosen car will be delivered directly to your door for free.

Got any questions?

Get in touch! One of the team would be happy to help, you can contact us here.