The Facts about Car Leasing


Whether you’re an individual or business, it’s worth considering an alternative to buying your vehicle(s)

The latest stats show that car leasing has never been more popular in the US, accounting for 30% of the financing of new vehicles.

America sneezes and Britain catches a cold, as the saying goes, and with lots of advantages – not least that you get a better, more reliable car – an increasing number of us this side of the pond are choosing to go down the same road.

Let’s look at the things you need to know before deciding whether to join them…

How does car leasing work?

When you lease a vehicle, you put down a deposit and pay a series of monthly payments, typically for between two and four years. The amount you pay is based on factors like how many miles you drive each year and how long you want to lease it for.

It’s not unlike renting a home: you treat it like your own, keep it in good shape, and return the keys at the end of the agreement.

Car leasing deals are sometimes expressed as two numbers, such as ‘9 and 35’. This means that there will be a set price per month, and the deposit will be 9 times the set price followed by 35 months of payments – amounting to a deal that spans 36 months.

What’s best thing about car leasing?

You don’t have to be a petrolhead to see the appeal of driving away in a completely new car every couple of years, without having to fork out steep upfront costs. With leasing, you can change your vehicle as often as you get a new mobile phone.

And as you don’t own it, you’re not paying its full value – so the monthly payments are usually lower than other forms of finance. The result: you can afford a better vehicle.

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Warranty and breakdown cover

With newer cars less likely to break down, there’ll be fewer worries about unreliability. But even if something does go wrong the car is likely to be covered by a manufacturer’s warranty – exactly the same one as if you went to a dealership showroom and bought the car outright.

Most manufacturer warranties last at least three years, so there’s a good chance that the warranty will cover your leasing agreement. If it is then you’ll be able to get all non-consumable parts replaced for free.

Many lease agreements include breakdown cover as standard or as an optional extra to put your mind at ease.

Road tax

Most lease agreements will have road tax included in the overall price. All you need to pay is the deposit and the monthly bills.


Cars don’t need an MOT certificate until they reach three years old, so most leasers won’t pay for an MOT either.


You have to purchase insurance separately, and most finance companies require you to buy fully comprehensive cover. But the insurance should not cost anymore than if it was on a non-leased car.


It is your responsibility to get your car serviced in line with manufacturer recommendations. Many lease agreements include maintenance packages as standard or as an optional extra.


Most leasing companies will drop-off your car at the start of the agreement and pick it up when its finished. All for free.

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