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What's Included in Personal Car Leasing?

 Published 20th September 2023
General Guides 

So you're thinking of leaping into the world of personal car leasing, but you've not navigated this before and don't know what to expect. Is personal car leasing all it's really cracked up to be? We'll aim to unpack exactly what personal car leasing entails, to ensure you know all the pros and cons to help make the most informed choice about whether embarking on a personal car lease deal is up your street. More and more people are choosing to lease rather than buy their new car – so, read on to find out why so many millions are opting for leasing.

What is personal car leasing?

Car leasing is sometimes known as personal contract hire and is basically a way to rent or long-term hire a car without having to pay for the vehicle upfront. The monthly payments are agreed on at the start of the contract and they are for a fixed length of time – generally between two and five years. As you're paying for the depreciation of the value of the car, not the overall value, generally the payments are lower than they would be for regular finance taken to purchase the vehicle. At the end of the lease, you simply return the car to the dealer and begin your new lease deal – meaning you are always able to take advantage of the newest technology and features and aren't left with the hassle of trying to sell a second-hand car.

How much will it cost?

The cost of your monthly payments for your car lease deal will depend on a few factors. If you select a high-value vehicle to lease, it will cost more than a lower-end or mid-range value car – so you need to consider the amount you can afford to budget before signing any agreement. However, there are other factors that feed into how much your lease deal will cost. The main things that determine how much your monthly payments will be are:

  • The market value of the car at the start of the contract.
  • The estimated value of the car at the end of the lease, which is the residual value.
  • The mileage allowance. The amount of miles you're likely to use each year will impact the value of the car and a fixed allowance of annual miles is arranged at the start – although you can sometimes change this during the contract if you find you're using it more than you had anticipated.
  • The length of the lease.
  • Any other admin fees and initial payment.

One of the biggest benefits of a personal car lease is the monthly payments are fixed at the start of the contract and won't change throughout, meaning that budgeting is much easier – you'll always know what the costs will be – and those payments are usually much lower than the cost of a loan repayment that is the alternative way of paying for the large purchase of a new car. The arrangement of a lease deal can be personalised to you and your circumstances to make sure it meets your budget and needs. Road tax is included for the duration of a personal contract hire agreement. Lease deals with Gateway2Lease also include some level of roadside assistance. General maintenance of the car isn't covered by the lease deal, although a new car will likely be under a manufacturer's warranty – covering you if any significant mechanical issues were to arise that shouldn't have happened at such an early stage.

Am I eligible for a car lease?

Another beauty of the personal car lease deal is almost everyone is able to meet the criteria. Part of the application process will involve a credit check to make sure you are creditworthy and to assess any risk to the finance provider. The main criteria for being able to access a personal car lease are:

  • You must hold a full UK driving licence and passport to prove your identity.
  • A recent utility bill, council tax bill or bank statement to prove your current address.
  • Recent bank statements, payslips or tax returns to prove your monthly income will be able to cover the lease payments.
  • A good to excellent credit score - a credit check will be carried out to make sure you are creditworthy.

You will also need to arrange your fully-comprehensive insurance for your car for when you take delivery – so that you can legally drive your vehicle immediately.

How does personal car leasing work?

When you've decided to take the plunge, the fun begins. The first part is the exciting bit – researching and test-driving your perfect ride. Now is your chance to check out all the different cars you've thought you might like so you can narrow it down to the one that suits you, your family and your lifestyle needs. When you've found the car you want to lease, you negotiate your contract type, mileage allowance and how much of an initial payment you want to make. An initial payment, is usually equal to three regular monthly payments, although if you wish to pay a larger sum it will result in lower instalments throughout the rest of the contract. This negotiation will lead to an official quotation which, when you approve it, will trigger the credit checking process. When the credit check has been approved, a vehicle order form will be produced and the process of releasing your vehicle from stock or the initiation of your factory order will begin. Whilst your car is being made ready, you will finalise all the financial details such as organising setting up insurance and the direct debit and paying the admin fees, so that the moment your new lease car is delivered to your door you can get out on the open road with the wind in your hair!

When your contract comes to an end you will simply hand your car back with no further obligations and no second-hand car to try and sell. As long as there is no damage to the car, allowing for fair wear and tear, you'll have no additional costs to pay, leaving you free to begin a new contract on the latest model and able to enjoy that new car feel all over again.

What's the catch?

There really isn't one! If you're someone who prefers to own their vehicle or likes to make modifications to their vehicle, then a lease will not be suitable for you. However, if you're someone who likes to drive a car with the latest innovations for driving, safety and technology, then a personal lease deal is the perfect solution. Not many people can afford the vast sum needed to purchase a brand new car outright, and we all know the moment you drive it off the garage forecourt it starts to depreciate, so why not join the almost 2 million other drivers out there in the UK, and benefit from a personal lease so you can drive that new car you've been dreaming of for a fraction of the cost? Owning your car also means owning the hassle of resale and any large bills that come with an older and depreciating car – something you can have peace of mind about when you take a lease deal instead.

Gateway2Lease has been providing clients with competitive, affordable leases for years, and with the widest range of available cars, as well as many hot lease deals, we're confident we can find you the perfect vehicle to suit your budget and requirements. If you're looking for a personal lease deal and are still confused about where to look, or how to go about starting the process, then get in touch with one of our expert team who will be happy to steer you through the process.

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