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Car Leasing – All You Need to Know

Car Leasing can seem a bit scary but it’s pretty straight forward really and ideal if you fit into one of these categories:

  • Want a new car every 2 to 3 years
  • Can’t afford to buy a car outright
  • Get a car allowance from work

We have answered all the frequently asked questions below so you can make an informed decision about if it’s the right decision for you!

Is the car mine at the end of the lease agreement?

Depends what time of lease you have; with personal car hire agreement (PCH) then the car needs to be returned at the end of the lease agreement. However, with personal contract purchase (PCP) you have the option to pay a bubble payment at the end in order to own it outright.

Does it cost more to lease or buy a car?

It’s not necessarily cheaper but definitely more affordable to lease than to buy, especially for those of us without deep pockets. It also depends on whether the car is brand new because buying a brand new car outright is definitely not a great investment as it depreciates the second you drive it away. In that situation leasing is more cost effective- and also means another new car every 2-3 years!

Does the dealership repair the car or do I?

When you take out the lease deal you will be given the option to take out maintenance cover with the dealership; in this situation you would take the car back to them.

If not, get in touch with your insurance the same way you would normally; insurance is not included in any lease deals and is the drivers responsibility to source. If the vehicle is written off or stolen your insurance pay out would cover the majority of the outstanding finance amount but optional gap insurance would cover the difference in this situation. Might be something to have a think about at the time of taking out your lease. These unfortunate circumstances can happen to us all and I wouldn’t want to be the one caught short for the sake of a few extra quid!

My car needs a service /new tyres/ MOT! What do I do?

Again, there are often maintenance packages that cover all of this when you take out the lease. However, a new car doesn’t need an MOT for the first three years anyway so don’t be sucked in by a salesman scaring you with this argument…

Once you have taken delivery of your vehicle, an optional maintenance package can take the worry out of vehicle ownership. It can also be an extra unnecessary cost so make sure you weigh up if you need it and if you can afford it. If you do opt for a maintenance package the work can be carried out at the main dealer of your choice leaving you in control of where and when. Most main dealers will offer a courtesy vehicle whilst yours is being serviced or repaired, but if you can’t be without a vehicle you can arrange a relief vehicle as an part of the contract, available after 24, 36 or 48 hours.

What happens if my car breaks down?

Most new vehicles have breakdown cover as part of the manufacturer’s warranty. Some dealerships will include AA/ RAC breakdown cover with the lease deal too so it is question you should ask at the time of signing on the dotted line. They may even throw it in for free– you don’t ask you don’t get!

Can I lease with bad credit?

There are specific companies which offer deals specifically to people with bad credit but most dealerships would give a lease deal to almost anyone because worst case scenario they can just take the car back!

Can I drive the car if the lease is in someone else’s name?

Yes! Same as if you won a car it comes down to the insurance- so if you are insured, yes. If not, no.

I am 18/only just passed my test, can I still lease?

Anyone with a valid full UK driving license can lease a car.

Can I part ex my car?

It depends on the dealership, some bigger gargages will take your car as a deposit, have a shop around.

I am on JSA/Benefits – Can I lease a car?

Finance providers tend to take the line of ‘responsible lending’ so will only lease to people or organisations that can show proof of income. If you can show that you have a regular and permanent cash flow you may be considered. It will deend on the lender but it is likely to be much more difficult on JSA/ benefits.

I have personalised registration plates? Can I use them?

Absolutely. The dealership will talk you though the process and you probably wont get them on straight away as you have to register with the DVLA.

Can I go for a test drive?

Yes, all dealerships should let you test drive before making a decision, don’t buy before you try!

Does insurance come included in the car leasing deal?

No, insurance is normally purchased separately.

What does ‘factory order’ mean?

A Factory order is when the car is built to your specifications by the manufacturer. A factory order would be necessary if the car is out out stock or you are asking for something very specific.

What happens at the end of the contract?

Typically, the car is handed back to the finance company and you are free to start fresh or move on elsewhere. However, you may be able to extend the contract or buy the car depending on the type of lease agreement.

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