0800 808 5715 Open Mon - Thu 9AM-5:30PM / Fri 9AM-5PM
Car Leasing Explained

Car Leasing Explained

Car Leasing is a way of driving a new vehicle over a fixed term with lower monthly rentals and without the worry or commitment of owning a car.

What type of car leasing packages do we offer?

Most deals on our site are Contract Hire and are available to business or private individuals. A few offers are based on Operating Lease which is basically the same as Contract Hire but includes the first year’s road tax only. Contract Hire includes road tax for the full term.

What is Contract Hire?

Contract Hire is simply a contract to hire a vehicle for a fixed period. You can also add a full maintenance package for a fixed monthly amount which will cover all fair wear and tear items and servicing.

Things that determine the monthly rental amount are:

  • The cost of the vehicle
  • The future vehicle value
  • Your contract mileage
  • The number of rentals you pay up front

What is the difference between Business Contract Hire and Personal Contract Hire?

Business Contract Hire and Personal Contract Hire are essentially the same thing. The difference is simply whether the agreement is in a business name or in a private individual’s name.

Pricing on Our Site

  • Business Contract Hire – the price displayed excludes VAT
  • Personal Contract Hire – the price displayed includes VAT

Length of Contract (Contract Term)

Our Contract Hire offers are usually either over 24, 36 or 48 months. Occasionally we have 12 or 18 month offers.

Rentals in Advance

You have the option of paying either 1, 3, 6, 9 or 12 rentals at the start of the contract. You then pay monthly rentals till the end of the contract. The more rentals you pay at the start the lower your ongoing monthly rentals will be.

How does the mileage allowance and mileage excess work?

When ordering your lease car you we will base the contract on what you mileage you anticipate driving for the duration of the contract. The higher the mileage the higher the monthly rentals will be.

Excess Mileage

You will be charged for every mile over the contract mileage. The excess mileage charge will be stated on your agreement.

Contract Hire Example

  • Contract Hire Term – 24 months
  • Agreed Contract Mileage – 20,000
  • Rental Profile – 6+23 rentals (29 rentals in total)
  • Monthly Rental Amount – £200 including vat
  • This means in month one you pay – 6 rentals at £200 = £1,200
  • Then 23 monthly rentals of £200 each
  • At the Contract End in month 24 the vehicle will be collected from your premises.

Vehicle Maintenance Package

You can also add a full maintenance package for a fixed monthly amount which will cover all fair wear and tear items and servicing. What is covered may differ slightly between different finance providers.

End Of Contract

At the end of the contract the vehicle will be collected by an agent on behalf of the finance company. The agent will carry out a full vehicle inspection, checking for damages on the exterior and interior of the car. As a result of this inspection you may receive a damages bill from the finance company. The inspection and any charges made should be in line with the industry standard fair wear and tear guide which is produced by the British Vehicle Rental and Leasing Association. You can view a copy here.

As a basic guide you should take good care of the vehicle and make sure it is serviced and maintained as per the manufacturer and leasing company guidelines.

Got any question? Read our guides below