What do you need to lease a car?
ENTERING the world of car leasing means lower initial upfront costs and the flexibility of monthly payments over an extended period of time.
While purchasing a new vehicle means that you’ll have full ownership, it often entails paying hefty interest payments on loans or a large amount of savings to buy outright, which can be major blockers for anyone considering getting a new car.
- Visit AutoTrader to browse car leasing options here
Leasing is a great alternative to traditional car ownership and it has many positive benefits.
AutoTrader is the go-to hub for leasing a wide range of cars, vans and pickup trucks at all price points, and an ideal starting point for anyone thinking about leasing a vehicle.
Not only is leasing a great option for drivers who don’t have a large amount of cash to part with at once, but it’s also a great way to regularly upgrade your vehicle.
Car leasing also allows for fair wear and tear, meaning acceptable damage based on the duration of your lease is permitted, however, if there is excessive damage to the vehicle outside of the agreement you will incur extra charges.
A lease agreement is exactly that, an agreement and not a declaration of ownership, it’s essential to understand that leasing means you’ll never own the car.
In this guide, we will be shedding light on what you need to consider before deciding to lease a car.
- Visit AutoTrader to browse car leasing options here
What is car leasing and how does it work?
A car lease is akin to a long-term rental agreement, which typically lasts between two and five years.
It offers road users the ability to drive a desirable and nearly new vehicle for a fixed monthly fee.
Like when you rent a property without owning it, car leasing allows you to pay a fee each month to use your chosen vehicle for the duration of the contract.
Lease agreements usually allow you to also include maintenance for things such as servicing or tyre replacement.
Leasing with AutoTrader gives you access to a trusted marketplace with thousands of brand-new, factory-fresh cars to choose from that are available for delivery straight away.
During a lease agreement, as the driver and lessee you will have to stick to any mileage limitations and maintain the condition of the car in line with any wear-and-tear clauses in the leasing agreement.
At the end of the lease, the car is returned to the leasing company.
But to be eligible you will need a good credit score and the ability to pay a down payment for the remaining costs.
How much does car leasing cost?
Car leasing costs vary widely depending on the car you want, with costs typically ranging between £100 and £500 per month.
The length of the rental agreement and how much of an upfront payment you are willing to pay will significantly affect the monthly instalments you’ll have to pay.
Often leasing is the most affordable and hassle-free option if you want to drive a newer car.
When setting up your lease, it is possible to tailor your deal to monthly payments and the length of the agreement to suit your budget and needs.
Unlike rivals, AutoTrader does not charge additional admin fees, so any initial price and monthly payment is the only cost you’ll need to pay upfront.
Generally, leasing a newer car also means you will not have to worry about many of the other costs associated with buying a used car outright.
MOT isn’t covered unless you opt for a maintenance package that has MOT inclusion.
For pre-registered vehicles, the warranty is counting down, meaning you’ll get less than the full three years of coverage.
But it is worth noting that exceeding mileage limits will incur extra charges, likewise, any major unfixed damages or excessive wear to the vehicle will result in a charge from your leasing provider.
- Visit AutoTrader to browse car leasing options here
How long are car leases?
Car leases typically have agreement durations that range from two to four years, though lease terms can vary depending on the leasing company and your individual preferences.
A lease of two years will allow you to upgrade to a newer car more frequently.
In contrast, longer lease terms of four years or more generally result in lower monthly payments but may incur higher total expenses over the entire lease period (especially on newer models).
The choice of how long of a term you go for often depends on factors like your budget, desired vehicle model and your driving habits.
A bonus of AutoTrader’s leasing service is flexible lease deals, giving you full control over details such as how long you want to keep the car, monthly costs and even the upfront fee you wish to pay.
Is it better to lease or buy a car?
The decision to lease or buy a new car is purely down to personal preference and whether you have a good enough credit score to be eligible.
Leasing is a financial contract and you will need to have a good credit score to qualify for an agreement.
The leasing company will want to ensure you can afford the monthly payments, and if you have bad credit or fail to meet the criteria you may be declined.
Buying a car outright typically demands a substantial upfront investment and may limit the choice of new models that are within your budget.
In contrast, leasing offers much greater flexibility and lower monthly costs to drive a new or nearly new car model.
Leasing is often a fast and simple process, with platforms like AutoTrader able to deliver your new car straight to your front door once your agreement has been approved.
But there are some downsides to leasing to consider too.
If you want to give the car back before the agreed end date of a lease agreement, you will likely have to pay the remaining balance all in one go.
You also will not own the car at the end of the contract.
Can you lease a car with bad credit?
Leasing a car with bad credit is challenging, and often not possible to do.
Typically, most leasing companies prefer their lessees to have good credit scores to minimise their potential risk.
Some leasing companies do offer options for individuals with a poor credit history.
But these specialised leasing programs may require higher down payments, or impose much stricter terms such as lower mileage allowances or higher interest rates.
Additionally, anyone with poor credit who wants a lease may need a co-signature on the agreement to be eligible.
- Visit AutoTrader to browse car leasing options here