How to Get a Lease on a Car

Fancy getting your hands on a brand new car every few years, without bankrupting yourself? Leasing is a convenient way to do that, and one that's growing in popularity. Also known as personal contract hire (PCH), it differs from personal contract purchase (PCP) in that you don't have the option to buy the car at the end of the deal. That said, the information below will still generally apply to getting both PCH and PCP agreements. So, simply read on to find out how to get a lease on a car.

Car leasing guide

1. Decide whether you want to lease

Before committing to a lease deal, take the time to consider whether it makes more sense for you than alternative financing options.

On the plus side, leasing offers the cheapest way to get behind the wheel of a brand new car. You don’t need to worry about depreciation, since you won’t be selling the car on. You’ll also benefit from the manufacturer’s warranty for the term of the deal, and the arrangement is simple – you pay every month while using the car, then hand it back at the end of the term.

On the other hand, you won’t ever own the car on a PCH agreement. You’ll have to keep the agreed mileage limits in mind, and if you damage the car it could end up seriously costly.

2. Find a leasing deal that’s right for you

There’ll be hundreds of deals out there that you can search easily online. If you have a specific model in mind, you can filter your search for it straightaway. If not, you can search for your preferred length of contract, the body style you’re after, or how much you’re looking to pay.

Work out what you’ll be paying over the entire length of the contract, including the deposit and any processing fees. Then you can compare this figure with other kinds of financing, and with the cost of depreciation if you were to buy the car new, to work out whether the deal makes sense for you. PCH deals cover the cost of depreciation plus a profit margin for the lender, but as the lender can benefit from economies of scale that individuals can’t, they can be competitive.

Concerned about bad credit, take a look at car leasing options in our expert finance advice guide.

3. Choose your term and mileage limit

Most car leasing contracts run for between two and four years, although you might find a bit of flex on that. Have a look at various options, as there’s no set rule for which length of contract works out cheaper. Try to figure out as accurately as possible how many miles you’re likely to cover – the higher the mileage limit you set, the more you’re likely to pay. Of course, predicting the future isn’t always easy, so check how much you’d pay if you do end up exceeding the mileage limit. If your circumstances change during the contract, try contacting the finance provider to see what can be arranged.

4. Apply for finance

This step should be fairly straightforward for most people. The dealership will ask you to fill in a form with details such as name, address and employment details. Some finance companies might ask for additional documents such as bank statements or a proof of address. It’s also common to have to provide proof of income documents such as payslips or invoices.

5. Order your lease car

Once your finance application is approved, the dealer will order your car. You’ll normally be asked to confirm you wish to proceed with the order, often in the form of an email.

6. Take delivery of the car

The car will normally be delivered free to any address in England, Scotland or Wales. Deliveries to Northern Ireland are only to the nearest port. It will either be delivered on a transporter or driven by a delivery company employee. It’s worth checking the mileage on delivery – if there are miles on the clock from the drive to your house, you’ll need to record this on the delivery note to make sure it doesn’t come out of your agreed allowance. Also check the car for damage and missing extras such as the warranty or service book.

7. Maintain the car while you’re leasing it

You might not be keeping the car, but that doesn’t mean you can afford to neglect it. The contract will require you to maintain the car in a roadworthy condition. This means servicing it on schedule. Some contracts will include maintenance in the monthly fee – if you’re interested in this, enquire about it when shopping around for a deal.

8. Plan ahead for your next lease

If you’re wanting to lease another car when your current contract expires, you’ll need to start the process three months before the expiry date to ensure you’re not left without a vehicle between contracts. Or perhaps you want to extend your current lease? If so, get in touch with the finance company to see what they can offer. Before handing a car back at the end of a lease, it’s worth taking photos of the car’s condition just in case.

If you want to get your hands on a new car without breaking the bank, leasing is a simple and convenient way to go about it. Once you’ve decided that car finance is right for you, a bit of research will turn up the deal that best suits your circumstances. For more advice on the different types of car finance and purchasing options, check out the rest of our finance motoring guides.

Not sure if you want to lease or buy? Take a look at the pros and cons in our handy advice guide.

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