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A Guide to Personal Car Leasing

 Published 9th August 2023
General Guides 

Personal leasing or, as it is sometimes known, personal contract hire is a popular way to finance a car purchase. It is a long-term rental agreement that allows individuals to lease a vehicle for a fixed amount of time – usually between two and four years – by paying a monthly fee. It is worth noting that personal leasing or contract hire is different from a traditional car loan, as the individual never owns the vehicle at the end of the lease term.

A personal lease is popular among individuals who prefer to drive new cars every few years without the long-term commitment of ownership and for those who don't have a large sum of money to purchase a car outright. With the current soaring prices of second-hand cars, which don't look likely to come down anytime soon, the option of leasing is becoming increasingly popular.

What are the benefits of personal car leasing?

There are quite a few benefits for those who opt for a personal car lease, and many find that it suits them, their driving requirements and their methods of finance management. A personal lease will mean that you know exactly how much you're paying every month – giving you greater control of your budget and finances. The payments every month stay the same during the length of the contract, so you can be sure of what money you have left each month. A personal lease is set up with a pre-determined annual mileage allowance, so you know how much you can travel, although some lease deals do allow you to change your allowance if you are likely to exceed it. With a personal lease, you won't have to worry about any of the risks of depreciation of the car, as you'll be handing it back in at the end of the contract and not having to try to sell it off to fund your next car purchase.

Servicing and maintenance can be included as part of the lease deal, to give you peace of mind and also enable you to manage your finances, as the low monthly payments will be known upfront and many of the leased cars are covered by a manufacturers warranty, so you won't get any unexpected repair costs. The road fund licence is provided for the full term of the contract helping you save money. The biggest benefit of a personal lease is the access it provides to premium vehicles which enables customers to lease a vehicle with a high specification, the latest technology or a high market retail price that they wouldn't be able to afford to buy otherwise. At the end of the lease, the car is returned to the finance provider and a new lease contract can be taken out on an upgraded model – enabling access to the latest upgrades and tech.

Are there any downsides to leasing?

There are a few downsides that should be thought through before signing on the dotted line. Firstly, if you need to exit your contract early for whatever reason, you will most likely find that there is an early termination fee that will have to be paid. This is a normal feature of any financial contract but should be considered prior to agreeing to a contract if you think that it might apply to you.

If at the end of the lease term there is any damage to the car, that wouldn't be considered fair wear and tear for the age and mileage of the car, then it could well mean that you will need to pay for repairs to return the vehicle to its expected standard. If you've damaged the alloy wheels or have managed to get a dent or significant scratch to the paintwork, you may well have to get these sorted out before returning the car.

If you have a change of circumstances, such as a change of job that will require a much higher level of mileage to be travelled, then you may need to make an amendment to the contract's mileage allowance mid-term and some finance providers don't allow you to alter the allowance – which will then cause you to incur a fee – so it is a good idea to check if your finance provider will allow mid-contract amendments if you think this particular issue might affect you.

What is fair wear and tear?

The fair wear and tear guide fair wear and tear guide has been put together by the BVRLA (British Vehicle Rental Leasing Association) and it determines the industry standard for the condition of a car when it is returned to the finance company at the end of the lease. Every vehicle which is used and driven under normal circumstances will suffer a certain level of deterioration. This is not damage that is caused by a crash, bump or from carrying items inappropriately in the boot, which will have to be repaired by yourself before returning the car - or you will face an additional end of lease penalty charge. The checks made will apply to every part of the car and you will need to make sure that you return the car in a clean and acceptable fashion. There are suggested checklists on our fair wear and tear guide page for further information.

What does a lease include?

Usually, a personal lease will include road tax, either for the first 12 months or for the duration of the whole lease, depending on the initial agreement and all of Gateway2Lease's cars come with a warranty – although you will need to discuss the warranty details for your chosen car as they can vary from vehicle to vehicle. Most new cars come with roadside assistance, which can range from one to three years. This is dependant on the make and model of the car so we would recommend you check on the manufacturers website for more information. Maintenance is not included in our lease deals, although if you want to make this a part of your lease deal, we can add it to your lease package for an additional monthly amount. Our maintenance packages typically include servicing, exhaust, tyres, brakes, battery and labour. Our lease deals do not include insurance, which you will have to organise separately.

How does the personal leasing process work?

Gateway2Lease prides itself on the simplicity of its personal leasing process, having entered the car leasing industry to make personal leases more accessible and easier many years ago. Our refined process takes place in six simple steps:

1. Choose your vehicle, mileage, contract type and initial rental – this is the fun part. You get to look at all the cars on offer and decide which one works best for your unique requirements and budget. Our knowledgeable and friendly team are on hand to help you if the process seems daunting.

2. Get your confirmed quotation in writing - you get the quotation to check that it all seems to match up to your needs and financial situation. If you're happy, then the credit proposal form is sent to the finance company to carry out credit checks to make sure you're creditworthy for the lease. You will need to have a good to excellent credit score in order to be underwritten for finance by one of our partners.

3. When the finance credit checks have been made you will sign a vehicle order form which will confirm vehicle details, trim levels and approximate delivery time. The signed form will initiate the factory order or release your chosen stock vehicle.

4. You will receive the finance documents by email that contains a schedule for payment, direct debit mandate and T's and C's – all of which you will need to sign and return to us by post or email.

5. The date of delivery will be confirmed - and they'll let you know a registration number as soon as possible to help you set up your insurance.

6. Delivery day - the new vehicle will be delivered directly to your door with a professional representative to answer all your questions. You're now free to hit the open road to test the paces of your new ride!

Gateway2Lease support throughout

With decades of experience in matching contented clients to their ideal vehicles, we are confident that we can find the perfect lease deal for you. We are only at the other end of a phone line to offer ongoing support and advice throughout your contract term and our friendly and expert team is always on hand to help guide you through every step of the journey to your dream car. If you have further questions, we have many frequently asked questions answered on our website, and our guide to personal leasing will offer more information.

Get in touch to begin your journey to driving the car of your dreams today, call us on 01299 407 360 to discuss your options with a member of our team.

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